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| Stock market sell-off continues as companies count cost of coronavirus crisis – business live | |
| (32 minutes later) | |
| European markets are in the red again after Dow plunged by 1,000 points last night | |
| Today’s flurry of corporate warnings highlights the damage that a Covid-19 pandemic would have on the global economy -- both on supply chains and on customer demand. | |
| Olivier Blanchard, a former chief economist at the International Monetary Fund, fears that governments will struggle to cushion this blow: | |
| European stocks are under pressure again, because Italian authorities have just announced the first positive coronavirus case in the South of Italy. | European stocks are under pressure again, because Italian authorities have just announced the first positive coronavirus case in the South of Italy. |
| A woman from Bergamo, who was on holiday with her friends in Sicily, has tested positive for Covid-19. The patient, who is not in serious conditions, has been transferred to the Hospital Cervello in Palermo, our Coronavirus liveblog reports.... | A woman from Bergamo, who was on holiday with her friends in Sicily, has tested positive for Covid-19. The patient, who is not in serious conditions, has been transferred to the Hospital Cervello in Palermo, our Coronavirus liveblog reports.... |
| Three more people have died from the virus in Iran (taking the total to 15), and there are almost 1,000 cases in South Korea. | Three more people have died from the virus in Iran (taking the total to 15), and there are almost 1,000 cases in South Korea. |
| This bad news is weighing on the markets, with cruise operator Carnival and holiday operator TUI both down 2%, among the big fallers in London. The UK, Italian and Spanish markets are all in the red again. | This bad news is weighing on the markets, with cruise operator Carnival and holiday operator TUI both down 2%, among the big fallers in London. The UK, Italian and Spanish markets are all in the red again. |
| Josh Mahony, senior market analyst at IG, explains: | Josh Mahony, senior market analyst at IG, explains: |
| The rally has fizzled out! | The rally has fizzled out! |
| Britain’s FTSE 100 has dropped back to yesterday’s two-month closing low of 7163 points, and the Stoxx 600 index is slightly negative. | Britain’s FTSE 100 has dropped back to yesterday’s two-month closing low of 7163 points, and the Stoxx 600 index is slightly negative. |
| Another specialist UK manufacturer, Morgan Advanced Materials, also expects to lose millions of pounds due to Covid-19. | Another specialist UK manufacturer, Morgan Advanced Materials, also expects to lose millions of pounds due to Covid-19. |
| Morgan makes heat-resistant products such as thermal ceramics, crucibles and high-tech seals for use in extreme temperatures and corrosive environments. | Morgan makes heat-resistant products such as thermal ceramics, crucibles and high-tech seals for use in extreme temperatures and corrosive environments. |
| It has has been forced to suspend work at a Chinese factory since the coronavirus outbreak began. It also expects to keep a plant in northern Italy closed for the next two weeks. | It has has been forced to suspend work at a Chinese factory since the coronavirus outbreak began. It also expects to keep a plant in northern Italy closed for the next two weeks. |
| This will dent Morgan’s output - and thus revenues and profits -- as Reuters explains: | This will dent Morgan’s output - and thus revenues and profits -- as Reuters explains: |
| Morgan made operating profits of £134m last year, so this is a small but noticeable hit. | Morgan made operating profits of £134m last year, so this is a small but noticeable hit. |
| UK engineering and consulting firm Ricardo has issued a profit warning, due to the coronavirus. | UK engineering and consulting firm Ricardo has issued a profit warning, due to the coronavirus. |
| Ricardo, which focuses on the transport, energy and scarce resources sectors, has told investors that full-year earnings will suffer a ‘material’ hit because of the Coronavirus’ disruptive impact on its China auto and rail operations. | Ricardo, which focuses on the transport, energy and scarce resources sectors, has told investors that full-year earnings will suffer a ‘material’ hit because of the Coronavirus’ disruptive impact on its China auto and rail operations. |
| Ricardo, which has nine offices and technical centres in China, says business development, project delivery and client engagement have all suffered from the crisis. | Ricardo, which has nine offices and technical centres in China, says business development, project delivery and client engagement have all suffered from the crisis. |
| It says: | It says: |
| European stock markets have opened a little higher after Monday’s rout, but it looks very fragile. | European stock markets have opened a little higher after Monday’s rout, but it looks very fragile. |
| The EU-wide Stoxx 600 index is up 0.5% this morning, having tumbled 3% yesterday. Germany’s DAX and France’s CAC are up around 0.6%. | The EU-wide Stoxx 600 index is up 0.5% this morning, having tumbled 3% yesterday. Germany’s DAX and France’s CAC are up around 0.6%. |
| However the Italian FTSE MIB is continuing to fall, down another 0.5%, after it reported 7 coronavirus deaths and over 200 infections. | However the Italian FTSE MIB is continuing to fall, down another 0.5%, after it reported 7 coronavirus deaths and over 200 infections. |
| The number of cases of Covid-19 worldwide has now hit 80,000 - our main liveblog on the crisis has all the details: | The number of cases of Covid-19 worldwide has now hit 80,000 - our main liveblog on the crisis has all the details: |
| UK specialist chemicals firm Croda has also told the City that the coronavirus crisis could hurt its business. | UK specialist chemicals firm Croda has also told the City that the coronavirus crisis could hurt its business. |
| FTSE 100-listed Croda has five offices in China, in Shanghai, Guangzhou, Beijing, Hong Kong and Taipei, so has suffered some disruption from the restrictions enforced by Beijing. | FTSE 100-listed Croda has five offices in China, in Shanghai, Guangzhou, Beijing, Hong Kong and Taipei, so has suffered some disruption from the restrictions enforced by Beijing. |
| It told shareholders this morning: | It told shareholders this morning: |
| Shares in Croda are down 1.5%, after it also cautioned that demand in industrial markets is expected to remain weak but stable. | Shares in Croda are down 1.5%, after it also cautioned that demand in industrial markets is expected to remain weak but stable. |
| Shares in UK engineering firm Meggitt have fallen by 4.5% at the start of trading, after it warned that the coronavirus crisis will hit its growth. | Shares in UK engineering firm Meggitt have fallen by 4.5% at the start of trading, after it warned that the coronavirus crisis will hit its growth. |
| Meggitt, which makes components for the aerospace, defence and energy markets, told shareholders that its key markets will suffer from the spread of Covid-19. | Meggitt, which makes components for the aerospace, defence and energy markets, told shareholders that its key markets will suffer from the spread of Covid-19. |
| It told the City that organic revenue growth will slow this year, explaining: | It told the City that organic revenue growth will slow this year, explaining: |
| Meggitt added that air travel grow is likely to be curtailed by the virus (as industry body IATA warned last week), and that global supply chains will probably suffer from a production backlog due to Chinese factories being closed. | Meggitt added that air travel grow is likely to be curtailed by the virus (as industry body IATA warned last week), and that global supply chains will probably suffer from a production backlog due to Chinese factories being closed. |
| This has pushed the company’s shares to the bottom of the FTSE 100 leaderboard, down 27p at 567p. | This has pushed the company’s shares to the bottom of the FTSE 100 leaderboard, down 27p at 567p. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Investors around the globe are reeling from the worst day in two years, as anxiety over the coronavirus crisis hit fever pitch. | Investors around the globe are reeling from the worst day in two years, as anxiety over the coronavirus crisis hit fever pitch. |
| Stocks tumbled across the globe on Monday, with America’s Dow Jones shedding more than 1,000 points by the close. That’s its third biggest points decline ever, as technology companies, energy providers and mining firms bore the brunt. | Stocks tumbled across the globe on Monday, with America’s Dow Jones shedding more than 1,000 points by the close. That’s its third biggest points decline ever, as technology companies, energy providers and mining firms bore the brunt. |
| The corporate cost of the crisis is mounting too. Overnight, Mastercard cut its financial outlook due to the outbreak and United Airlines withdrew its full-year 2020 guidance. | The corporate cost of the crisis is mounting too. Overnight, Mastercard cut its financial outlook due to the outbreak and United Airlines withdrew its full-year 2020 guidance. |
| Japan’s stock markets has suffered heavy losses overnight, as traders catch up with events after a holiday on Monday. The Nikkei index has fallen by 3.34%, or 781 points, to 22,605 in a spate of nervy selling. | Japan’s stock markets has suffered heavy losses overnight, as traders catch up with events after a holiday on Monday. The Nikkei index has fallen by 3.34%, or 781 points, to 22,605 in a spate of nervy selling. |
| Australia’s S&P/ASX index has fallen again today, losing another 1.6%. | Australia’s S&P/ASX index has fallen again today, losing another 1.6%. |
| European stocks also shed over 3% yesterday, with the Italian FTSE MIB sliding by over 5% after a spate of coronavirus deaths in Italy. | European stocks also shed over 3% yesterday, with the Italian FTSE MIB sliding by over 5% after a spate of coronavirus deaths in Italy. |
| Fears of a pandemic, with massive implications on global supply chains and world economic growth, are rife. | Fears of a pandemic, with massive implications on global supply chains and world economic growth, are rife. |
| But after very heavy losses across the board yesterday, we may see a small recovery in European stock markets today. Britain’s FTSE 100 has just opened 30 points higher, at 7,186. | But after very heavy losses across the board yesterday, we may see a small recovery in European stock markets today. Britain’s FTSE 100 has just opened 30 points higher, at 7,186. |
| That’s only a teensy recovery, mind, as it plunged by 247 points during Monday’s rout. | That’s only a teensy recovery, mind, as it plunged by 247 points during Monday’s rout. |
| Investors are glued to the latest reports of infection levels, with the global death toll now over 2,600. | Investors are glued to the latest reports of infection levels, with the global death toll now over 2,600. |
| So there’s little chance of the markets calming down soon, argues Michael Hewson of CMC Markets. | So there’s little chance of the markets calming down soon, argues Michael Hewson of CMC Markets. |
| The agenda | The agenda |
| 11am GMT: CBI’s index of UK retail sales: expected to rise to 4, from 0 in January | 11am GMT: CBI’s index of UK retail sales: expected to rise to 4, from 0 in January |
| 2pm GMT: The S&P/Case-Shiller index of US house prices | 2pm GMT: The S&P/Case-Shiller index of US house prices |
| 3pm GMT: US consumer confidence survey for February: expected to rise to 132, from 131.6 | 3pm GMT: US consumer confidence survey for February: expected to rise to 132, from 131.6 |