Seoul led a sharp drop across Asian and European equity markets Monday as South Korea announced a surge in COVID-19 infections, while oil plunged and safe-haven assets rallied on growing concerns about a possible pandemic.

With the outbreak showing little sign of easing, investors are increasingly concerned it could have a much longer-term impact on the world economy, which was already stuttering, with a number of companies warning about their bottom lines.

Traders had been broadly optimistic that the virus -- which has killed nearly 2,600 and infected 80,000 -- was being contained outside China but a spurt of infections and deaths in other countries including South Korea, Italy and Iran has fanned fears of a wider outbreak.

"While the coronavirus is probably slowing in China, it is speeding up elsewhere," said Charles Gillams at RJMG Asset Management.

On Monday, South Korea said it had a total of 833 cases, making it the world's worst-hit country outside China, with seven people now dead.

President Moon Jae-in has raised the virus alert to the highest "red" level, in a bid to strengthen the government response to the spiralling outbreak.

News of the spread hammered the KOSPI, which sank almost four percent, with market heavyweight Samsung diving 4.1 percent. The won fell 0.9 percent and is sitting at a six-month low.

Hong Kong shed 1.8 percent, with Sydney, Bangkok and Manila each dropping more than two percent. Taipei, Jakarta, Singapore and Wellington were all off more than one percent. Mumbai eased one percent with eyes on Donald Trump's visit to India.

Shanghai was off 0.3 percent, with losses tempered by a series of economy-boosting measures including support for businesses and other stimulus measures.

London started the day 1.8 percent down, while Frankfurt and Paris each tumbled 2.6 percent.

- 'Extremely problematic' -

The losses tracked a selloff on Wall Street, where the S&P 500 and Nasdaq each gave up more than one percent, while US 30-year Treasury yields hit an all-time high, indicating a rush into the safe havens.

Reports of the spread of the virus "raised concerns that we could be starting to see the beginnings of a global pandemic, with authorities seemingly at a loss to explain how or why the virus is spreading, particularly in Europe", said Michael Hewson at CMC Markets UK.

Chinese President Xi Jinping said the epidemic was the "largest public health emergency" since the founding of the People's Republic in 1949 and admitted authorities must learn from "obvious shortcomings exposed" during its response.

Beijing will decide later in the day whether to postpone its annual parliament session for the first time since the Cultural Revolution owing to the epidemic.

Meanwhile, Italy has introduced severe containment measures previously seen only in China, with more than 50,000 people in about a dozen northern Italian towns told to stay home.

The virus, which has infected at least 152 people and left three dead in Italy, has also led to the cancellation of several shows at Milan Fashion Week and the early closure of the Venice Carnival.

"Of all the alarming aspects of the rapidly spreading virus out Wuhan is that it's showing up in patients with no connection to China or the city of Wuhan, ground zero for the outbreak," said AxiCorp's Stephen Innes.

This, he added, suggested "things are about to get extremely problematic, and market conditions could get exponentially worse this week".

The fear on trading floors has sent gold, a go-to asset in times of uncertainty, to a seven-year high, while high-yielding, riskier currencies including the Australian dollar and Indonesian rupiah, were well down.

Crude prices tanked on worries about plunging demand from China, which is the world's biggest importer and consumer of the commodity, sending energy firms in the region sharply lower. Both main contracts are down more than 10 percent so far this year.

"With the volatility we're seeing in the coronavirus event, that's creating angst in the market on the back of growth and demand expectations and we've seen oil prices weaken," said David Lennox at Fat Prophets. "The converse of that is the same event is carrying investors toward a safe haven play and that's gold."

Among individual stocks, travel and tourism linked firms continue to take a heavy hit with Sydney-listed Qantas plunging more than seven percent, while in Hong Kong, Air China lost nearly six percent and Cathay Pacific fell more than one percent.

Also in Hong Kong, Macau casino operators Sands China, Galaxy Entertainment and Wynn Macau were down between one and 3.8 percent.

- Key figures around 0820 GMT -

Seoul - KOSPI: DOWN 3.9 percent at 2,079.04 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,031.23 (close)

Hong Kong - Hang Seng: DOWN 1.8 percent at 26,820.88 (close)

Tokyo - Nikkei 225: Closed for a public holiday

London - FTSE 100: DOWN 1.8 percent at 7,272.20

Brent Crude: DOWN 2.9 percent at $56.83 per barrel

West Texas Intermediate: DOWN 2.7 percent at $51.96 per barrel

Gold: UP 1.5 percent at $1,667 per ounce

Dollar/yen: DOWN at 111.56 yen from 111.57 yen at 2200 GMT

Euro/dollar: DOWN at $1.0817 from $1.0843

Pound/dollar: DOWN at $1.2940 from $1.2964

Euro/pound: DOWN 83.55 pence at 83.61 pence

New York - Dow: DOWN 0.8 percent to 28,992.41 (close)

-- Bloomberg News contributed to this story --