World oil prices crashed Monday, fueling a vicious selloff on stock markets which were already buckling from the spreading coronavirus outbreak.

Stocks tanked as the global oil market nosedived 30 percent at one stage after top exporter Saudi Arabia slashed the prices it charges customers following a bust-up with Russia over crude production cuts.

Major US indices plunged more than seven percent -- with the Dow finishing more than 2,000 points lower in its worst session since 2008 -- following a 15-minute halt to trading early in the session triggered by a seven percent drop.

Later in Brazil, the Ibovespa index finished down more than 12 percent.

"The markets have passed from panic mode into pure hysteria," said Ayush Ansal, chief investment officer at trading firm Crimson Black Capital.

"Markets were at the breaking point before Saudi Arabia's decision to launch an oil price war but this latest development has taken them beyond that."

Saudi Arabia opened the spigots Monday, slashing oil prices after Russia refused on Friday to join producers in cutting output to defend prices.

Saudi Arabia launched an all-out oil war at the weekend, with the biggest cut in its prices in the past 20 years, reports say Saudi Arabia launched an all-out oil war at the weekend, with the biggest cut in its prices in the past 20 years, reports say Photo: AFP / GIUSEPPE CACACE

The dizzying oil drop -- the steepest since the 1991 Gulf War -- sent investors fleeing for safety alongside mounting fears over the worsening coronavirus, which has seen Italy lock down a swathe of its north.

Late Monday, Italian Prime Minister Giuseppe Conte announced that he was extending a lockdown decree to the entire country.

Workers don masks at a factory in Vasna Buzarg, India, as the rapidly spreading coronavirus fans fears over the global economy Workers don masks at a factory in Vasna Buzarg, India, as the rapidly spreading coronavirus fans fears over the global economy Photo: AFP / SAM PANTHAKY

"This will be remembered as Black Monday," said analyst Neil Wilson at trading site Markets.com.

Italy's stock market took the heaviest battering after a chunk of the county's northern region was sealed off -- including Milan and Venice -- as authorities struggled to contain the spread and impact of coronavirus.

At the end of an exceptionally volatile trading day, Milan's FTSE MIB index stood more than 11 percent lower.

As the disease claims more lives around the world, dealers are shedding riskier assets for safe haven investment, sending gold and the yen surging and pushing US Treasury yields to record lows while the dollar was broadly lower against the yen, euro and other currencies.

A trader checks stock prices from the outside after authorities closed the Boursa Kuwait on March 8 A trader checks stock prices from the outside after authorities closed the Boursa Kuwait on March 8 Photo: AFP / YASSER AL-ZAYYAT

While governments and central banks have unleashed, or are preparing to unleash, stimulus measures, the spread of COVID-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.

Trading floors in Asia were also a sea of red, with Tokyo plunging more than five percent, Hong Kong more than four and Sydney more than seven percent.

Saudi equities also tanked, with oil titan Aramco's shares leading the plunge. The Dubai, Kuwait and Abu Dhabi exchanges also suffered sharp drops.

Oil majors bore the brunt of a fierce wave of selling while other commodities firms also nursed heavy losses.

Australian stocks have plunged more than 7%, its worst day since the 2008 global financial crisis Australian stocks have plunged more than 7%, its worst day since the 2008 global financial crisis Photo: AFP / Peter PARKS

Hong Kong-listed CNOOC tumbled 17 percent and PetroChina more than nine percent, while in Tokyo, Inpex dived 13 percent. In Sydney, Santos plummeted 27 percent and Woodside Petroleum tanked 18.4 percent.

Back in the US, Exxon Mobil slumped 12.2 percent, while midsized producer Occidental Petroleum plummeted 52.0 percent and oil services titan Halliburton 37.6 percent.

Brent Crude: DOWN 24 percent at $34.36 per barrel

West Texas Intermediate: DOWN 25 percent at $33.13 per barrel

New York - Dow: DOWN 7.8 percent at 23,851.02 (close)

New York - S&P 500: DOWN 7.6 percent at 2,746.56 (close)

New York - Nasdaq: DOWN 7.3 percent at 7,950.68 (close)

London - FTSE 100: DOWN 7.7 percent at 5,965.77 (close)

Frankfurt - DAX 30: DOWN 7.9 percent at 10,625.02 (close)

Paris - CAC 40: DOWN 8.4 percent at 4,707.91 (close)

Milan - FTSE MIB: DOWN 11.2 percent at 18,475.91 (close)

EURO STOXX 50: DOWN 8.5 percent at 2,959.07 (close)

Tokyo - Nikkei 225: DOWN 5.1 percent at 19,698.76 (close)

Hong Kong - Hang Seng: DOWN 4.2 percent at 25,040.46 (close)

Shanghai - Composite: DOWN 3.0 percent at 2,943.29 (close)

Dollar/yen: DOWN at 102.42 yen from 105.39 yen at 2200 GMT

Euro/dollar: UP at $1.1448 from $1.1284

Pound/dollar: UP at $1.3112 from $1.3048