Markets tumbled on Monday while traditional safe haven gold soared as the spread of the coronavirus outside China accelerated – with infections jumping in South Korea, Italy and the Middle East.

South Korea is on high alert after the number of infections surged to more than 600 with six deaths reported on Monday.

In Italy, a third person infected with the flu-like virus died, while the number of cases jumped to above 150 from just three before Friday.

Iran, which announced its first two cases on Wednesday, said it had confirmed 43 cases and eight deaths, with most of the infections in the Shi’ite Muslim holy city of Qom. Saudi Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration restrictions on the Islamic Republic.

The Australian dollar, considered a liquid proxy for China plays, was down 0.4 per cent as it languished near an 11-year low. It is currently trading at 0.66 against the US dollar.

Australia’s benchmark index slid 1.6 per cent while New Zealand was down about 1 per cent. South Korea’s KOSPI index fell 2.2 per cent.

That left MSCI’s broadest index of Asia-Pacific shares outside Japan off 0.7 per cent to 541.48, the lowest since February 5. Japanese markets were closed for a public holiday.

“It promises to be an interesting session here in Asia, with the bears back wrestling a bit more of a say here, and gold and bond bulls feeling pretty good about their exposures,” said Chris Weston, head of research at broker Pepperstone.

“The news flow from the weekend has changed the game somewhat, where the focus is much more on the threat of an outbreak outside of China.”

The virus has killed 2346 people in China, which has reported 76,947 cases. The ongoing outbreak of COVID-19 has also slammed the brakes on the world’s second largest economy.

It has also spread to 28 other countries and territories.

Investors fretted over the mounting economic toll from the virus, betting on more monetary policy action from central banks. In response, US Fed fund futures surged signalling more rate cuts later this year.

While markets had largely brushed aside fears of long-term economic damage from the virus, a steady drip of new cases in countries beyond China has kept concerns alive.

On Friday, US stocks were beaten down by concerns about the virus and after data showed American business activity stalled in February, signalling a contraction for the first time since 2016.

US chipmakers fell sharply last week as a flash reading of the IHS Markit services sector Purchasing Managers’ Index dropped to its lowest level since October 2013. The manufacturing sector also clocked its lowest reading since August.

Analysts expect the Korean won to slump against the dollar as one of the favourite risk proxies for investors.

The won has fallen more than 4.5 per cent on the dollar so far this year. It was last unchanged at 1206.87

Oil prices slid as investors fretted about crude demand being pinched by the impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output.

Brent crude slumped 2.8 per cent, or $1.63, to $56.87 a barrel while US crude dropped 2.6 per cent, or $1.4, to $51.97 a barrel.

US gold futures climbed 1.2 per cent at $1,668.6 an ounce. Spot gold jumped to a seven-year high of 1,678.58 after marking its biggest weekly gain last week since early August.

-with AAP