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As coronavirus spreads...

Markets plunge as Flint says virus is ‘stress test for world’

Douglas Flint

Douglas Flint: ‘unknown unknowns’ (pic: Terry Murden)

Markets plummeted in a global sell-off as investors grew increasingly anxious over the rapid spread of the deadly coronavirus.

The FTSE 100 closed 247.09 points or 3.24% lower at 7156.83, wiping £62 billion off the value of blue chip companies. There was a small uptick on Tuesday morning before shares continued their downward spiral. The index closed down a further 138.95 points or 1.94% to 7017.88.

US stocks joined the bloodbath, dropping 1,000 points on at Monday’s open as investors piled into low-risk assets such as gold and the US dollar. Other markets across Europe fell by more than 4%.

The price of oil took a sharp hit with Brent crude down 4.8% or $2.86 per barrel at $55.64. Airlines plunged on concerns that the outbreak will lead to a fall in travel.

The Dow Jones ended down 3.55%, while the S&P 500 lost 3.35% and the Nasdaq 3.71%.

Japan’s Nikkei was down 3.4% having been shut on Monday, while Shanghai blue chips eased 1.6%.

Standard Life chairman Douglas Flint warned that the virus is a “stress test for the world” as government’s and supply chains come under pressure to combat the disease.

Mr Flint said in an interview with Bloomberg that the Chinese government appeared to be taking the correct action to quarantine people and instigate measures to maintain economic activity.

However, there were worries about the virus impacting the travel and supply chains and spreading to countries less well equipped to deal with it.

“This is a stress test for the world. It is a stress test for china. It is a stress test for the supply chain,” he said.

The hope is that the world comes out of it with knowledge about how to deal with it economically, he added.

“It is an unknown unknown.”

He said governments had to show they were taking action that would reassure people.

“The [Chinese] government is engaging and I think that plays well. I can’t think what more they could do.

“Governments’ role across the world, whether it is one case or 100,000, is to say we are on it and we have the skills. Rhetoric really matters.

“If you think back to the financial crisis governments said we will do whatever it takes and people were reassured.”

International Monetary Fund managing director Kristalina Georgieva at a weekend meeting of the world’s top 20 economies capped warnings echoed by central banks around the world that China will see a sharp fall in first quarter economic growth.

Primark owner Associated British Foods said on Monday there is a risk of supply shortages on some lines later in the financial year if delays in factory production in China are prolonged due to coronavirus.

AB Foods sources a range of product from China and says it is well stocked in the short-term.

Shares in budget airline Easyjet crashed 16.37% near to today’s close as the airlines and holiday firms were the biggest fallers. TUI was down 10.48%, while British Airways owner IAG was 8.92% lower.

A small Scottish company run by former professional footballer Jim Melrose says a revolutionary disinfectant it sells online could help contain the coronavirus.

Roclar, run by Mr Melrose, has the UK licence to sell Bacoban, one of the world’s most clinically effective infection control products currently on the market.

It provides long-term protection lasting up to 10 days – much longer than any other disinfectants on the market

Latest on the virus

UK: Four cruise ship passengers flown to Britain on Saturday have tested positive for coronavirus, bringing the total number of cases in the UK to 13.

They were among 30 repatriated Britons and two Irish citizens beginning a 14-day quarantine at Arrowe Park Hospital in Wirral.

The four UK nationals caught the virus on the Diamond Princess liner in Japan, England’s chief medical officer said.

They have now been transferred to specialist NHS infection centres.

Tenerife: A hotel was in lockdown after an Italian tourist tested positive for coronavirus. 

The visitor was found to be infected yesterday after feeling unwell during his stay at the H10 Costa Adeje Palace. 

Around 1,000 guests have now been quarantined inside the hotel, Spanish media says, with police reportedly surrounding the complex. 

Italy has the highest number of coronavirus cases in Europe. Ten people have died and there have been 322 infections. About 50,000 people in two northern “hotspot” regions – Veneto and Lombardy – have been put under quarantine for two weeks. Museums and cinemas have been shut and the last two days of Venice Carnival called off.

Austria: a coronavirus taskforce has been assembled to discuss whether to introduce border controls with Italy. Meanwhile, train services have resumed via the Brenner Pass, a key route between Austria and Italy. The block was imposed on Sunday evening after two possible cases of the new coronavirus were discovered on board a train heading from Italy to southern Germany. 

China: more than 2,500 people have died from the virus, with some 77,150 cases confirmed cases reported.

The government has asked banks to offer more credit. But a survey of small and medium Chinese firms found millions struggling to survive.

The Chinese Association of Small and Medium Enterprises said around 60% could cover regular payments for only one to two months before running out of cash. Only 10% said they could hold out six months or longer.

North Korea has quarantined 380 foreigners in a bid to stop the coronavirus from breaking out. Around 200 foreigners had already been confined to their compounds for the past 30 days – but as that came to an end, the quarantine has been extended.

Iran has confirmed 43 cases of the virus and eight deaths.

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