The Wuhan virus isn't just hitting Chinese stocks - here's how global oil and bond markets are moving

• Oil fell on Thursday after the Chinese stock market plunged on Wuhan virus fears.
• Japanese Government Bonds, often seen as a safe-haven asset, tightened.
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Concerns about the impact the coronavirus could have on the Chinese economy rippled through global oil and bond markets Thursday.

Oil fell to its lowest price in seven weeks, reflecting worry that demand will slump if the Wuhan virus undermines China's economic growth. March future contracts of brent crude fell to trade at $61.35 as of 10:35 AM, a 2.9% drop, while WTI crude oil declined just over 3%. Yields on Japanese government bonds, seen as a safe-haven asset, tightened across maturities, with the JGB 30-year yield tightening the most dramatically, by 3 basis points.

Meanwhile stocks in China plummeted earlier Thursday.

Those market reactions come after the Chinese government put three cities on lockdown, restricting transportation and closing down business to combat the spread of the fast-spreading coronavirus in the country.

That sparked risk-off sentiment to define the day in Chinese equities, where the Shanghai Composite index lost 2.75%, and the SZSE Component index fell 3.45%. Elsewhere, Japan's Nikkei index closed down 0.98% and in Hong Kong, the Hang Seng index fell 1.52%.

Investors concerned about the coronavirus may remember the impact the SARS epidemic had on the Chinese economy in 2003, but the Wuhan virus seems less contagious and fatal, according to Yang Huang, healthcare analyst at Bank of America.

If the coronavirus indeed proves to be less severe than SARS, the effect on the Chinese economy will be "modest with short-term disruptions," said Helen Qiao, China and Asia economist at Bank of America, in a note Thursday.

Still, this weekend, millions in China will travel to celebrate the Lunar New Year. Analysts are concerned that this bump in movement could cause the virus to spread more.

"We expect many more domestic and international travelers during the LNY holidays this year compared with 17 years ago," Qiao said. While the overall hit to Chinese growth may be limited, "we believe its negative impact on cities with high population density and large mobility will be greater than otherwise."