FTSE 100 falls 174 points
Coronavirus weighs on markets as death toll hits 106
A health official at a checkpoint in Hubei province
UPDATE 28 JAN: Coronavirus continues to weigh on global markets, wiping billions off company values as the number of confirmed deaths rises to 106 and the authorities admit that its spread is accelerating.
The FTSE 100 plunged 173.93 points or 2.3% to close at 7,412.05 in one of its biggest one day falls in recent months but recovered slightly when markets opened on Tuesday (9am: up 5.6pts). Other European markets were down by more than 2% on Monday. The biggest hits were felt by luxury, airline and hotel stock, which benefit from Chinese consumers.
Analysts at Bernstein said Chinese nationals accounted for just 2% of the global luxury goods market in 2003 against 35% in 2019.
Luxury retailer Burberry, highly exposed to the Chinese consumer, closed down 4.6% with French peers LVMH and Kering shedding 3.7% and 3.6% respectively.
US stocks suffered their worst day in over three months . The Dow Jones Industrial Average fell 453.93 points, or 1.57%, the S&P 500 lost 51.84 points, or 1.57%, and the Nasdaq Composite dropped 175.60 points, or 1.89%.
Chinese factories ordered staff to work from home and travel is restricted as investors are becoming increasingly nervous about the coronavirus.
Market analysts are now working out the impact on the global economy. Growth in China slipped from 11% to 9% following the SARS outbreak in 2002-03 although it also coincided with a general slowdown.
On Monday Japan’s Nikkei was down 2.03%, the biggest one-day fall in five months, and the Shanghai stock exchange was 3% lower, although the Hang Seng rose 0.15% after Hong Kong banned entry to anyone from Hubei province in China, where the outbreak was first detected.
Brent crude is 2.1% lower at $59.39 a barrel and West Texas Intermediate also fell, down 2.3% to $52.94, as it emerged that the death toll had risen to 81 people with 2,744 confirmed cases.
The local government in Wuhan, source of the first cases of coronavirus, said no-one from the city had left China in the past four days. An estimated 4,096 tourists from Wuhan are still out of the country.
China is testing an HIV drug as a treatment for symptoms of the coronavirus, said drugmaker AbbVie Inc on Sunday.