Stock markets and oil prices went into freefall Monday as interest rate cuts and fresh stimulus measures by central banks failed to dampen fears amid the global coronavirus pandemic.

The US Federal Reserve on Sunday slashed borrowing costs to zero -- its second emergency cut in less than two weeks -- and took action coordinated with central banks in several European countries to counteract global "dollar funding pressures."

The Fed acted again on Monday, with its New York branch announcing another $500 billion in cash injections on top of a massive liquidity and bond-buying program unveiled in recent days, and the Bank of Japan also announcing new bond purchases.

G7 leaders meanwhile pledged to "do whatever it takes" to protect the economy, and US President Donald Trump acknowledged the world's largest economy "may be" headed into recession.

But traders were unimpressed, and with the virus showing no sign of letting up, the head of the World Health Organization chief Tedros Adhanom Ghebreyesus said it was impossible to tell when it would peak globally.

That sent Wall Street indices to their worst day since 1987, with the S&P 500 and Nasdaq dropping about 12 percent and the Dow sinking nearly 13 percent.

In Asia-Pacific, Sydney's stock market had its worst daily drop on record, falling 9.7 percent.

Shanghai shed 3.4 percent after the scale of the crisis was laid bare by data showing Chinese industrial production for January and February shrank 13.5 percent, the first contraction in around 30 years.

Tokyo ended 2.5 percent lower, after a rally sparked by the Bank of Japan's support measures announcement fizzled, while Europe's main markets were down around 10 percent.

"The aggressive rate cut and stimulus package from the Fed last night acted as a warning signal to the markets," said CMC Market's UK analyst David Madden, giving off "the impression they, the Fed, are nervous, and traders have picked up on that."

Fears are also rising that the Fed may have reached the limit of its power to fend off recession as the coronavirus nears.

"We're navigating blind as no one truly knows how long this is going to last, let alone what the full consequences are going to be," Oanda analyst Craig Erlam told AFP.

Equity markets have been whipsawed by the disease, which has now infected almost 170,000 people and killed more than 6,000 with several countries going into lockdown as Europe becomes the new epicenter of the outbreak.

But Trump said the crisis should wash through the economy by August, after which there will be a "tremendous surge in the stock market.

Oil prices continued their nosedive as a price war between major producers Saudi Arabia and Russia added to sliding crude demand caused by the virus.

Brent North Sea oil plunged more than 12 percent to a four-year low, as WTI fell below $30 per-barrel.

Airlines were among the biggest losers after slashing capacity, with British Airways-parent IAG crashing 27 percent and Lufthansa off by 12 percent. US airlines made a plea for a $50 billion government bailout, warning of vanishing liquidity.

The auto sector also slid as manufacturers Fiat Chrysler, Peugeot-Citroen and Renault said they were halting some if not all production. Some FCA workers at a truck plant in Michigan staged a walkout amid concerns about the virus.

The G7 emergency leaders meeting was a sign of global cooperation but there was little in the way of specifics offered, unlike the actions taken during the 2008 global financial crisis.

Stephen Innes, global chief markets strategist at AxiCorp, said the pressure was on G7 leaders to find a way to end the carnage.

The virus outbreak saw Chinese industrial production contract in January-February for the first time in 30 years, putting huge pressure on the world's number two economy
The virus outbreak saw Chinese industrial production contract in January-February for the first time in 30 years, putting huge pressure on the world's number two economy AFP / STR

"The G7 needs to come up with a convincing roadmap and remove markets from peril's path, by at minimum curtailing short-selling, if not a complete shutdown until the virus data is better understood," he told AFP.

Innes said leaders should consider closing markets when they hit the triggers for automatic trading pauses.

"Volume is low and volatility high, and the ultimate losers are hard-working folks' retirement plans and those whose planned retirement move to the beach got pushed back another five or 10 years," he said.

New York - Dow: DOWN 12.9 percent at 20,188.52 (close)

New York - S&P 500: DOWN 12.0 percent at 2,386.13 (close)

New York - Nasdaq: DOWN 12.3 percent at 6,904.59 (close)

London - FTSE 100: DOWN 4.0 percent at 5,151.08 points (close)

Frankfurt - DAX 30: DOWN 5.1 percent at 8,742.25 (close)

Paris - CAC 40: DOWN 5.8 percent at 3,881.46 (close)

Milan - FTSE MIB: DOWN 6.1 percent at 14,980.34 (close)

EURO STOXX 50: DOWN 5.3 percent at 2,450.37 (close)

Tokyo - Nikkei 225: DOWN 2.5 percent at 17,002.04 (close)

Hong Kong - Hang Seng: DOWN 4.0 percent at 23,063.57 (close)

Shanghai - Composite: DOWN 3.4 percent at 2,789.25 (close)

Dollar/yen: DOWN at 105.92 yen from 108.02 yen at 2130 GMT on Friday

Euro/dollar: UP at $1.1117 from $1.1098

Pound/dollar: DOWN at $1.224 from $1.2273

Euro/pound: UP at 91.10 pence from 90.18 pence

Brent North Sea crude: DOWN 12.02 percent at $29.78 per barrel

West Texas Intermediate: DOWN 9.6 percent at $28.69 per barrel