Coronavirus latest: Oil price crash sends shockwaves through financial markets


Royal College of Physicians delays conference until January

Clive Cookson, science editor, reports:

The UK Royal College of Physicians has postponed its annual conference from next month to January 2021, “so that doctors can concentrate on looking after patients with Covid-19 and avoid putting themselves at any increased risk from the virus”.

Andrew Goddard, president of the London-based body that aims to improve the practice of medicine, said:

It simply wouldn’t be sensible to bring together hundreds of doctors from all over the UK and other countries too, when they are already stretched, dealing with Covid-19 on top of all the other pressures on the NHS.

Energy-exposed ETFs take severe hit

Anna Gross in London

A number of exchange traded funds (ETFs) — index-tracking funds that can be traded on exchanges just like a stock — exposed to volatility in sectors such as oil and energy in the wake of an oil price war and coronavirus fears, have taken a severe hit since Friday.

JKO’s S&P GSCI Brent Crude fund shed nearly 42 per cent of its value over the past two trading days. Meanwhile the Australia-based OOO AU crude oil fund fell about 33 per cent. Several ETFs that track the S&P GSCI index slipped between 20 to 30 per cent.

Israeli funds feature heavily among the most affected funds. The Tachlit DJ Internet Composite, which is registered on the Tel Aviv stock exchange and tracks the performance of companies involved in internet-related activities, fell about 32 per cent, while another that tracks stocks on the Tel Aviv Stock Exchange 35 Index, is down by the same amount. A third Israeli ETF that tracks the S&P aerospace and defence index is down 29.4 per cent.

Invesco’s RDXS LN Equity index, which is registered in Ireland and tracks the Russian Depositary Index, is down 20 per cent.

Health monitoring body calls for at least $8bn to boost response

The Global Preparedness Monitoring Board, an independent health monitoring and advocacy body, is calling for the immediate injection of at least $8bn new funding to bolster the collective Covid-19 response, writes Clive Cookson, science editor.

Although the World Bank last week committed up to $12bn support for Covid-19 response at country level and the IMF announced a $50bn package for mitigating economic damage, the GPMB says these announcements still leave a critical funding gap of $8bn.

Gro Harlem Brundtland and Elhadj As Sy, co-chairs of the GPMB, said in a joint statement:

It is clear that the prospect of a pandemic with multiple waves is increasing. This is impacting every level of society, placing enormous pressure on emergency healthcare, disrupting supply chains of vital medicines, resulting in businesses and schools closing. The outbreak is on course to cause economic losses greater than those of Sars, Ebola, Mers, and Zika combined.

The GPMB calculates that the most important gaps are:

• $2bn for vaccine development
• $1.5bn for research and development of treatments
• $1bn to support the World Health Organization emergency response
• $1bn for distributed vaccine manufacture and delivery
• $1bn for manufacture and delivery of treatments and diagnostics
• $750m for stockpiling vaccines and essential protective equipment (gloves, masks)
• $500m for diagnostics development
• $250m to strengthen unmet needs in regional surveillance and control

Junk bond prices tumble as problems mount for energy groups

Joe Rennison, Capital Markets Reporter, writes:

Junk bond prices have plummeted today, as an unfolding oil price war between Saudi Arabia and Russia hit energy companies already facing issues from the outbreak of the coronavirus.

Pain in the market centered on oil and natural gas companies, as Brent crude sank 22 per cent to around $35 per barrel on Monday morning, it’s lowest price since January 2016, when an oil price rout ended the era of $100-oil.

The cost of insuring against the default of high-yield bonds soared to 606 basis points, surpassing its peak during the last period of turmoil for energy debt in 2016, according to data from IHS Markit. Investment-grade default protection shot up to 125 basis point, its highest level since 2011.

BlackRock iShares high-yield bond exchange traded fund, known by its ticker HYG, sank 4.5 per cent in pre-market trading, its lowest price since the end of 2018.

“We are on the cusp of a new round of energy company restructurings, both in- and out-of-court,” said John Dixon, a high yield bond trader at Dinosaur Securities.

With many of these companies already spending more than cash flow, look for draconian cutbacks in capital expenditure which will further crimp already distressed servicers and suppliers.

French airport boss tests positive for virus

David Keohane in Paris reports:

The chief executive of French airport group ADP, Augustin de Romanet, has tested positive for the coronavirus.

Mr de Romanet, who is the first CEO of a major French company to say they have contracted the virus, tested positive on Saturday.

In a statement, ADP said that his “state of health is of no concern and does not prevent him from continuing to exercise his functions” but that he “he will stay at his home for 14 days.”

The group is investigating with whom Mr Romanet might have come into recent contact.

ADP, the operator of Paris Charles de Gaulle and Orly airports, recently agreed to buy India’s GMR Airports for €1.3bn and remains a potential privatisation candidate for Emmanuel Macron’s French government, which owns about half of the group.

Fed ramps up repo operation offering $150bn in overnight loans

Colby Smith in New York

The Federal Reserve increased the amount of money it is injecting into overnight lending markets this week, amid a global sell-off in stocks and a rush into safe haven assets that sent government bond yields tumbling.

On Monday, the New York-arm of the US central bank said it will boost the size of its overnight and and short-term operations for the repo market, where investors borrow cash for short periods in exchange for high-quality collateral like treasuries, through March 12.

The Fed will offer at least $150bn in overnight loans, a $50bn increase from what was originally on offer. It will also raise the limit on the amount of cash it will lend into the market over a two-week period from at least $20bn to at least $45bn.

The increase came as crude prices crashed by more than 20 per cent on Monday, after Saudi Arabia launched a price war, which threatens to flood the oil market with supplies just as the coronavirus outbreak hits demand. The sell-off in oil sent stock markets plunging and government bond yields to fresh record lows.

Jumia delists hundreds of products after price gouging complaints

Jumia, the pan-African ecommerce giant, has delisted nearly 400 products from 168 sellers of hand sanitiser and face masks in its biggest market Nigeria, after complaints of price gouging from federal authorities, writes Neil Munshi in Lagos.

The Federal Competition and Consumer Protection Commission announced the move by the company known as the Amazon of Africa, as it moves to curb price rises related to the coronavirus outbreak.

The agency included excerpts of a letter from Jumia, which said that it would be conducting hourly checks on price gouging for products related to the outbreak.

The company also said that it had identified a seller from whom it can source directly and has formed a partnership with Reckitt Benckiser to offer reduced prices on hand sanitiser on the ecommerce platform, from which Jumia will take no commission.

And where it has spread

Steve Bernard‘s maps show the geographic reach of the disease:

Daily tally of virus spread

More than 110,000 people worldwide have been diagnosed with the Covid-19 infection, with China where the outbreak began by far the worst affected.

More than 3,000 deaths have been recorded in Hubei province, the Chinese region the virus was first detected in December. In Italy deaths soared over the weekend and, with a tally of 366, it is the worst hit outside China.

Steve Bernard in London has collated the latest daily cases of the coronavirus:

Swiss-Italian border closed for non-essential travel

Sam Jones in Zurich reports

The Swiss-Italian border has been closed to all travellers except commuters needing to reach places of work and goods traffic, the Swiss government has announced.

Italian and Swiss authorities began on Monday to set up additional control and security points along the ordinarily-porous border the two countries share.

Those wishing to cross will have to provide official proof of their work and its location.

“For all other activities, the Italian authorities have issued severe restrictions. Consequently, the Swiss and residents of Switzerland are asked not to travel to the regions concerned,” the Swiss Federal Council said in a statement.

Around 80,000 Italians cross into Switzerland each day to work according to Swiss federal statistics.

It is unclear how the new checks will effect ease of travel: crossings are limited to a small number of choke points through narrow valleys, such as the main border point at Chiasso, just north of lake Como.

Switzerland currently has 332 confirmed cases of the virus. Two Swiss citizens have died so far, according to the federal office of public health.

The country’s cantonal authorities and employers are already ramping up preparations for a significant worsening of the situation. The canton of Schaffhausen deployed its civil defence force on Monday to help triage potential patients at hospitals.

Google has meanwhile told all 4,000 of its employees in Zurich to work from home.

European airline shares outperform wider index

European airlines outperform the benchmark index, with shares in Ryanair scraping some gains on Monday to be one of the few Stoxx 600 members to rise, buoyed by the prospect of lower oil prices this year.

The Dublin-based low-cost airline, with its stock up about 0.4 per cent on Monday, outperformed the 6 per cent slide on the wider index. The Irish airline squeaked in a second-day advance, rebounding from a deep sell-off that began in earnest on February 24. That day its stock recorded a 13.5 per cent drop, which was its worst one-day slide since June 2016.

Other airline stocks joined Ryanair among the Stoxx 600 index’s better performers. Frankfurt-listed Lufthansa fell 2.7 per cent, easyJet slid about 3 per cent while British Airways owner International Airlines Group slipped 4 per cent. Air France-KLM shed 4 per cent.

Oil prices fell as much as 30 per cent on Monday after Saudi Arabia failed to reach an agreement with Russia over cutting supply in response to the coronavirus outbreak and said it would discount its crude and increase output.

Airline shares have been buffeted by concerns over the impact of the coronavirus, which has prompted flights to be cancelled and experts to predict the industry will lose more than $100bn in revenues this year.

EU-India summit cancelled on virus fears

Michael Peel in Brussels reports:

A high-profile EU-India summit scheduled this week has been cancelled because of the coronavirus and Nato has announced its first case, in the latest escalation of the outbreak’s impact on international institutions in Brussels.

The 27-member EU said on Monday that the meeting due to take place on Friday between its leaders and Narendra Modi, India’s premier, in the Belgian capital had been postponed by mutual consent because “both parties need to be focused on combating the disease”.

The European bloc said the two sides would look for a new date to meet “as early as possible”.

Nato, the 29-member military alliance based on the outskirts of Brussels, said on Monday that an employee had tested positive for the virus after returning from holiday in northern Italy and exhibiting fever-like symptoms at the end of last week.

“The staff member is currently at home in self-isolation,” the alliance said. “Within minutes of receiving the result, all the immediate work colleagues were informed. They had been working from home at the end of last week and continue to do so.”

Nato added that it had taken wider measures to curb the virus’s spread, including temporary suspension of some travel, encouraging staff to work from home, and temporary suspension of group visits to alliance headquarters.

Brussels weighing all options to support European economy

Jim Brunsden in Brussels reports:

European Commission president Ursula von der Leyen said that Brussels is exploring all available options for mitigating the impact of the virus.

“The spread of the virus has a vast impact, it also has a vast impact on the economy,” Ms von der Leyen told reporters in Brussels.

“We are looking into everything we can do in order to address the impacts on the economy,” she said.

Ms von der Leyen said that two main options are available to Brussels. The first is to be flexible in how it applies state-aid and budget rules, enabling authorities to do more to shore up their economies. The second is to provide financial support.

“The one is flexibility and the other one is money, indeed, and the Commission is in close contact of course with national authorities, with industry representatives and other stakeholders,” said Ms von der Leyen.

Brussels is also preparing for a meeting of EU finance ministers next week, she said, adding that she is in close contact with ECB president Christine Lagarde.

Spanish cases double overnight

Daniel Dombey in Madrid reports

The number of cases of coronavirus in Spain has more than doubled in 24 hours, rising to 999* on Monday, up from 469 cases the day before.

In Madrid, the country’s most affected region, the incidence of the virus has also doubled since Sunday, up to 436 cases from 202.

Dr Fernando Simón, the doctor coordinating the country’s response, said that, as of first thing on Monday morning, he knew of 16 people who had died of the virus throughout the country.

But the full figure is likely to be higher, because of additional deaths during the day.

“We have to acknowledge that there is local transmission [of the virus] in Spain, although it is limited,” Dr Simón said. “So it is logical that some countries put Spain on a list of [regions] at risk of local transmission.”

He added that his team would meet Madrid authorities to see if there was a need of additional measures in the region.

Separately, the Basque town of Vitoria has announced that all educational institutions – from kindergartens to universities – will be closed for 15 days in a bid to slow the spread of coronavirus in the region, where there have been 149 cases.

*Spanish authorities updated this figure to 999 around midday. Earlier in the morning they had reported 904 cases.

Iranian cases pass 7,000

Najmeh Bozorgmehr in Tehran reports:

Iran’s health ministry said on Monday that 7,161 people had now tested positive for the coronavirus — up from 6,566 on Sunday.

Of those infected, the ministry said 237 people had died. The number of fatalities stood at 194 yesterday.

Iran has suffered the third most deaths globally from the virus — after China and Italy — and has the fourth highest number of confirmed cases — after China, South Korea and Italy.

Nigeria confirms its second case

Neil Munshi in Lagos reports:

Nigeria has confirmed its second case of coronavirus, as the spread of the disease remains slow thus far in Africa’s largest country.

The patient is one of sixty people who had contact with Nigeria’s first case — an Italian who flew in to Lagos last month — who have been in isolation since authorities tracked them down, the health minister said in a statement on Monday.

The man has not shown any symptoms, but was tested along with other contacts currently in isolation. Scientists confirmed his diagnosis on Sunday.

The news came after a team of researchers from Nigeria announced that it had sequenced the genome of the coronavirus carried by the Italian and confirmed it as a match to the strain spreading in Italy and Wuhan.

Portuguese president self-isolates for two weeks

Peter Wise in Lisbon reports:

The president of Portugal has opted to isolate himself and suspend official duties for 14 days after a school student whose fellow pupils visited the presidential place was confirmed as having the coronavirus.

A statement issued by the office of Marcelo Rebelo de Sousa said he had decided to cancel all his public engagements including foreign visits for two weeks while his health was monitored at home. The president has shown no symptoms and was expected to be tested for the Covid-19 virus later on Monday.

At a time when Portuguese citizens are showing a high degree of civic maturity regarding the virus outbreak, the president believes he should set an example of robust preventive measures that will at the same allow him to continue working at his private residence.

The pupil from a school in Felgueiras in northern Portugal was not himself in the class that Mr Rebelo da Sousa welcomed last Tuesday. All schools, swimming pools, libraries and nursery schools have been closed in the area where the school is located.

A total of 30 cases of the Corvid-19 virus have so far been confirmed in Portugal, according to the Director General of Health.

Paris-based luxury stocks slide on heightened risks in Europe

Shares in French luxury goods makers took a hammering as the coronavirus outbreak worsened in the prosperous north of Italy, prompting the government to impose a lockdown on the 16m people who live there.

LVMH shares on Monday, down 6 per cent in midmorning Paris trading, were on track for their worst percentage slide since October 2018. Kering shares dropped about 7 per cent, while Prada fell 7.5 per cent. Milan-listed Moncler fell more than 9 per cent. Paris’s wider Cac40 fell 7 per cent.

Jefferies analysts see the personal luxury goods market falling by at least 3 per cent this year “as the speed and magnitude of first-half contraction is unlikely to be fully recovered in what we still expect to be a relatively buoyant second half/fourth quarter”.

“This is not as bad as 2008-09,” the analysts said in a note published on Monday, “but is having a proportionate impact due to the much greater role played by the Chinese cluster”.

They said the drop in Europe will “last longer and be just as harmful”.

Italy, the worst affected European country, has taken drastic steps to contain the outbreak as deaths soared over the weekend. The government imposed a lockdown on part of the north, an important region for the luxury and fashion industries. Italy’s death toll has risen to 366.

China has increased in importance for the global luxury and fashion industries. Chinese shoppers accounted for about 40 per cent of the €281bn spent on luxury goods globally last year, according to Jefferies, but drove 80 per cent of the growth, powering sales increases at companies such as LVMH and Kering.

Where things stand

Oil prices tumbled as much as 30 per cent after Saudi Arabia failed to reach an agreement with Russia over cutting supply in response to the coronavirus outbreak and said it would discount its crude and ramp up output.

The slide in oil has prompted equity markets to drop sharply:

• London’s FTSE 100 fell 7 per cent to put it on track for its worst day since the 2008-09 financial crisis.
• Germany’s Dax and France’s Cac 40 were both down 6 per cent.
• Futures trade suggested a 5 per cent slide on the S&P 500 when Wall Street opens.

Shares in oil producers have been the hardest hit with majors Total, BP and Royal Dutch Shell on track for their worst ever day of trading.

The currencies of oil producing countries were also hit hard, with the Russian rouble, Norwegian krone, Canadian dollar and Mexican peso all weakening substantially. The krone was down 4.7 per cent at one point at its lowest level against the dollar since 1985.

In bond markets, the 10-year US Treasury yield tumbled down through 0.5 per cent to a record low in the sharpest rally for American sovereign debt in more than a decade.

France urges Europe to coordinate its response to virus outbreak

David Keohane in Paris reports:

The French finance minister has urged Europe to come up with a “massive” economic stimulus plan as the continent grapples with the effects of the coronavirus and France’s growth estimates fall.

Bruno Le Maire said on Monday he expected a “strong, massive and coordinated response from Europe” to avoid the risk of an economic crisis.

As tourism numbers fall and the economic impact spreads, Mr Le Maire told radio station France Info that the virus could prompt the French growth rate to fall beneath 1 per cent this year, from a previous estimate of 1.3 per cent. Nineteen infected with the virus have died in France and more than 1,200 cases recorded, making it the worst affected European country after Italy.

The benchmark Cac40 stock index fell more than 6 per cent in mid-morning in Paris trading.

Mr Le Maire’s intervention comes as the Banque de France said the French economy will expand 0.1 per cent this quarter, compared with a previous estimate of 0.3 per cent.

“This slowdown is potentially severe but temporary,” said the governor of the Banque de France.

“Faced with this exceptional situation, we must have our eyes wide open but keep a cool head,” François Villeroy de Galhauhe added.

The economy will continue to have abundant liquidity… our main economic risk in the long term would be to move from the vigilance that is required to a series of overreactions that would freeze the country.

After Italy locked down the north of the country to slow the spread of the virus, France on Sunday banned indoor gatherings of more than 1,000 people, lifted caps on overtime for hospital workers and made it easier for people to consult doctors online.

Mr Le Maire encouraged “companies to declare themselves in partial activity”, adding that the government would “would stand by them”.

The government said local elections due to kick off on Sunday will go ahead.

North Sea oil producer shares under heavy selling pressure

Donato Paolo Mancini in London reports

London-listed oil companies exposed to the North Sea were among the biggest losers on Monday amid the oil price war and compounding woes surrounding fears of a recession caused by the global spread of coronavirus.

Premier Oil’s share price more than halved, shedding 57 per cent and reaching a price of 26.08p a share — a low not seen since the early 2000s, giving it a market cap of £210m. In earlier trade it slipped more than 70 per cent.

EnQuest shed 19 per cent, plunging to lows not seen since 2016 and to a market cap of £247m. Africa-focused Tullow Oil, another FTSE 250 producer, shed 42 per cent before paring back losses to 37 per cent, reaching a market cap of about £209m.

Companies in the sector have faced a delicate recovery after the 2014-2016 crash, when oil prices tanked, dragging companies in the sector lower. The latest oil crisis looks set to be the ultimate test of their resilience after the whole industry emerged from that crisis, working to cut costs and return to profitability amid lower oil prices.

A recent history of oil price falls

Investors braced for global downturn, Sentix survey shows

Martin Arnold in Frankfurt reports:

Investors are bracing themselves for a sharp downturn in the global economy due to the disruption of coronavirus, which they believe will trigger a deep recession in much of Europe, Asia and Latin America, a report revealed.

The Sentix survey of investors on Monday recorded its steepest monthly fall on record in its sentiment indicator for the eurozone economy, which was down by 22.3 points to minus 17.1, its lowest level since the bloc’s sovereign debt crisis in 2013.

Fear of coronavirus contagion has caused Italy to impose a quarantine on much of its prosperous industrial north, which contains a quarter of the country’s population and produces a third of its gross domestic product. Meanwhile school closures, event cancellations and travel restrictions on workers are starting to hurt tourism, airlines and leisure companies across Europe and Asia.

“The global spread of the new coronavirus is plunging the world economy into recession,” said Manfred Hübner, the managing director of German-based Sentix. “Never before have economic data from Sentix collapsed so sharply in all regions of the world within a month.”

Investor sentiment declined sharply for all regions, according to Sentix, which surveyed 1,155 last week. Investors were most pessimistic about the outlook for Latin America, the eurozone and Japan, while being relatively upbeat on the US.

Oil markets plummeted on Monday in response to fears of a Saudi-Russia price war, as stock markets suffered their biggest drop since the 2008 financial crisis and US sovereign bond yields set record lows as they fell closer to zero.

Economists have been rushing to slash their growth forecasts for the eurozone economy ahead of the European Central Bank’s rate-setting meeting on Thursday.

“The world is facing a medical emergency that monetary and fiscal policy cannot fix,” said Holger Schmieding, chief economist of Berenberg. “The situation will settle down once we have more clarity about the future course of the disease. Until then, we face serious downside risks.”

Mr Schmieding forecast eurozone GDP would fall 0.4 per cent in the first quarter, 0.5 per cent in the second quarter, while recovering slightly later in the year to end 2020 down 0.1 per cent overall.

More than a billion shares have traded hands in Europe

Trading activity has been aggressive so far today, with more than a billion shares in big European companies having already traded hands.

Volume on the Stoxx 600 index was already above one billion by 9am London time, more than three times the average for that time of day over the past 180 days, according to Bloomberg data.

The high trading volume comes as equities bourses across Europe have come under heavy pressure. The Stoxx 600 was down 5 per cent in recent dealings, with markets in London, Frankfurt, Paris and Milan all tumbling.

Lex: busts to show folly of last reboot

The largest industry subsector among US junk-rated companies is energy, write the FT’s Lex columnists.

This latest body blow will lead to more sector bankruptcies in the US where the numbers had already ticked up in 2019.

Fresh capital, and debt in particular, kept flocking to cash-guzzling companies, many of them shale oil producers, after the price implosion of 2015 and 2016.

Wall Street must finally, after this latest bust cycle, come to grips with the US energy sector’s fundamental inability to carry mountains of loans and bonds.

There will be no shortage of capital standing ready to recapitalise the energy sector, but the timing of rescue financings is crucial.

Read more on this story here

Demand for oil seen shrinking for first time in 11 years, IEA says

Anjli Raval, senior energy correspondent, writes:

Oil demand is expected to contract this year for the first time since 2009 as the coronavirus outbreak spreads beyond Asia and Europe and hits the global economy, the International Energy Agency said on Monday.

For the first time since the global financial crisis, demand is expected to fall year-on-year, by 90,000 barrels a day to just under 100m b/d, amid major disruptions to travel and trade.

This compares to earlier expectations for growth – from major oil companies and global energy agencies – of well over 1m b/d and the IEA’s February forecast of expansion of 825,000 b/d in 2020.

The level of revision, is “unprecedented”, said Fatih Birol who heads the IEA. “This situation seems to have no equal in the oil market’s history. There is a massive supply overhang and significant demand shock at the same time.”

The Paris-based energy body said in its monthly oil market report: “The situation remains fluid, creating an extraordinary degree of uncertainty over what the full global impact of the virus will be.”

Producer countries led by Opec and Russia were expected to enact cuts to stabilise the market. But Moscow’s failure to comply with a Saudi Arabia-led proposal for additional supply curbs saw a three-year alliance collapse.

As Saudi Arabia embarked upon a price war in response, oil prices plummeted on Monday – falling by 30 per cent – the biggest daily fall since the Gulf War in the early 1990s.

The IEA noted a visible decline in transport, industrial and commercial activity leading to a “massive drop” in quarterly global oil demand and an expected annual decline.

China accounted for more than 80 per cent of global oil demand growth in 2019, highlighting how central the Asian economy is for propping up the oil market, producer economies and the crude price.

In the IEA’s worst-case scenario, which assumes that countries hit by the virus recover more slowly while the epidemic spreads further beyond Europe and Asia, global oil demand could decline by 730,000 b/d in 2020.

Italy to use ‘massive shock therapy’ to curb impact of virus

Davide Ghiglione in Rome writes:

Giuseppe Conte said Italy will further increase spending in a “massive shock therapy” to tackle the impact of the coronavirus outbreak on the economy.

“We will not stop here,” said the Italian prime minister said in an interview with La Repubblica newspaper. “We will use a massive shock therapy. To come out of this emergency we will use all human and economic resources.”

Mr Conte added: “Europe cannot think of dealing with such an extraordinary situation with ordinary measures.”

He did not give further details on the measures. He said he would meet members of the opposition within the next 48 hours to discuss them.

“Support measures will be adequate to the difficult circumstances and aimed at preventing lasting damage to the supply side of the Italian economy and permanent employment losses,” said Roberto Gualtieri, Italy’s economy minister, in a statement. “Smart working arrangements will be used wherever possible and preventive measures will be adopted to protect the health of employees in the workplace.”

Mr Gualtieri said that “the economic measures that are in the works will be vigorous, commensurate to current needs, but temporary”.

The government announced last week a €7.5 bn stimulus package to tackle the impact of coronavirus on the economy, and it requested parliament’s approval for an increase in the deficit ceiling for 2020 in order to finance such measures.

“Along with this request, the government reiterated its commitment to returning to a fiscal consolidation and debt-reduction path as soon as the epidemic and its economic fallout are overcome. Finally, the government will spare no effort to ensure that a package of measures is agreed at the EU level in coordination with the whole international community,” Mr Gualtieri said.

Oil majors headed for worst ever day

Shares in European oil majors have plunged on Saudi Arabia’s threat to flood the market, with BP, Royal Dutch Shell and Total all on track for their worst ever day of trading.

BP fell 20 per cent shortly after the open, while Shell was down 22 per cent. In Paris, Total slipped 13 per cent after a delayed open.

Mid-cap producers were hit even harder, with Premier Oil down a whopping 72 per cent. Tullow Oil shed 48 per cent. Oilfield services groups Wood and Weir were down 23 per cent and 18 per cent respectively.

Brent crude, the international oil marker, was recently down 21 per cent at $31.75 a barrel. Earlier it fell more than 30 per cent.

European stocks slide into bear market

Europe’s major stock markets plunged into bear market territory in the opening minutes of trading on Monday.

A collapse in the price of oil has followed two weeks of intense market turmoil caused by escalating concerns over the economic impact of the coronavirus. The Stoxx Europe 600, which tracks the region’s largest companies, has now fallen more than 20 per cent from the highs it hit in mid-February, and was recently 6.5 per cent lower on the day.

“The plunge in oil has led to complete capitulation in other markets this morning,” said Jim Reid, a strategist at Deutsche Bank.

Buckle up for the US ride, advises Katie Martin

European credit markets are taking this badly. If this is a taste of what’s to come from the more oily US market, then buckle up, writes Katie Martin in London.

Europe’s iTraxx Crossover index, which reflects the perceived risk of defaults by European companies with low credit ratings, has leapt to 502 basis points, up by around 120 from Friday’s close.

Here’s Rob Smith and Joe Rennison explaining how this works and why it matters on Friday.

Iranian MPs call for quarantine of northern province of Mazandaran

Najmeh Bozorgmehr in Tehran reports

Members of parliament from Mazandaran have called on President Hassan Rouhani to quarantine the northern province as shortages of medical equipment have rung alarm bells and fuelled a rise in casualties.

This comes after Gilan, another northern province along the Caspian Sea, is reported to be struggling with severe shortages of face masks, gowns and hospital beds leading to infection and deaths of doctors and nurses, according to domestic media.

Tents have been set up in the courtyards of some hospitals in northern provinces while some unconfirmed reports suggest many patients are not admitted due to lack of beds.

Ali Mohammad Shaeri, a representative of members of parliament from Mazandaran province, urged Mr Rouhani to announce “a crisis situation” and closure of all restaurants, beaches and rental properties.

Official figures so far suggest 6,566 people have tested positive, 194 of whom died. But members of parliament from some of the worst hit provinces have said the casualties in their constituencies show the official number of deaths is understated.

Videos on social media show people from Mazandaran and Gilan provinces have spontaneously decided to block the roads — after the traffic police re-opened them under pressure from travellers — fueling public concerns about clashes between provinces.

EmoticonEuropean markets tumble at the open

London’s FTSE 100 fell at least 8 per cent as European markets plunged at the open, the London index’s biggest drop since 2008. Germany’s Dax was 7.5 per cent lower.

The opening of many European shares was delayed as market makers tried to price the sudden shock of the collapse in oil prices, and comes amid significant market volatility born out of the rolling economic disruption caused by the outbreak of the coronavirus.

Two-year gilt yield falls into negative territory

UK two-year gilt yields dropped into negative territory for the first time as investors sought the relative safety of UK debt amid intensifying fears over the coronavirus impact.

The yield on the short-term gilt fell 11 basis points to minus 0.02 per cent on Monday. Yields move inversely to prices.

Oil producer currencies knocked

The currencies of oil producing countries have come under heavy pressure this morning after international benchmark Brent tumbled by almost a third.

• The Russian rouble fell 7 per cent to Rbs74 to the dollar, its weakest since January 2016.
• Norway’s krone was down 3.1 per cent at NKr9.6. Earlier it fell as much as 4.7 per cent to its lowest level against the US currency since 1985.
• The Canadian dollar and Mexican peso each fell to roughly three-year lows against the dollar – down 1.4 per cent at C$1.36 and 6.7 per cent at 21.5 pesos respectively.

“In economic terms, the major oil exporters will all suffer an unwelcome additional brake to growth,” said Kit Juckes, at Société Génerale. He added:

Oil is a significant driver of GDP in Mexico, Norway, Canada, Russia, Brazil and Colombia and of course, the US is the world’s biggest oil producer in absolute terms now. None of those countries’ currencies is going to have a good day, though the dollar does still derive support from its reserve currency status.

US government bonds in biggest rally since 2009

US sovereign debt has rallied sharply as the collapse in oil prices and intensifying concerns over the coronavirus outbreak sends investors piling into havens.

The benchmark 10-year Treasury yield dropped 0.375 percentage point to 0.36 per cent, marking a new record low borrowing cost for American sovereign debt. Debt at other maturities has also rallied in price, with yields on two and 30-year Treasuries falling sharply.

Across the Atlantic, bonds considered to be shelters during times of market tumult also rallied. The 10-year German Bund yield dropped 0.126 percentage point to minus 0.845 per cent — also a historic low.

Investors have raced into the perceived safety of US and German government debt over past few weeks as riskier asset markets, like equities, have faced severe ructions.

The US 10-year yield has dropped 1.5 percentage points so far in 2020, the heaviest fall since the global financial crisis in 2008. The move has come as the Federal Reserve has already cut overnight borrowing costs by half a percentage point in the biggest reduction since the crisis.

Investors have said further action may be necessary from the Fed and other central banks as they attempt to buttress the global economy.

Italian bonds drop as coronavirus impact takes hold

Italy’s sovereign bonds fell as the coronavirus impact tightened its grip on the country’s northern economic powerhouse.

The yield on the 10-year, which moves inversely to the price, rose 0.264 percentage points to 1.34 per cent, their highest since January 22. The two-year yield rose 0.39 percentage points to 0.43 per cent.

That pushed the spread between the safer 10-year German Bund yield and its Italian counterpart to 2.17 percentage points up from 1.81 percentage points at the end of last week. The widening gap indicated that investors are fleeing the riskier Italian asset to the perceived safety of Germany securities. The yield on the German benchmark 10-year Bund fell to a record minus 0.834 per cent.

Italy’s death toll from the virus soared over the weekend. The latest toll of 366 deaths makes Italy the worst affected country after China.

North Korea flies out foreigners after coronavirus quarantine

By Song Jung-a in Seoul

More than 60 foreigners who were quarantined for more than a month in Pyongyang were allowed to leave the country on a special flight on Monday as North Korea faces the increasing risk of a coronavirus outbreak.

An Air Koryo flight carried the diplomats and other foreigners on the country’s first commercial flight to leave North Korea and landed in Russia’s far eastern city of Vladivostok on Monday, according to NK News and flight tracking site FlightAware.

North Korea, yet to report any confirmed case of Covid-19, placed about 10,000 people under quarantine to prevent the virus outbreak. Nearly 40 per cent of them have been released from quarantine, according to North Korean media reports.

North Korea acted swiftly to close borders as reports of the virus emerged from Wuhan in January. Pyongyang imposed tougher quarantine measures on foreigners. About 380 foreigners were placed under quarantine for about a month and 221 of them have been released after North Korea lifted the restrictions last week.

“Sad to say farewell this morning to colleagues from German Embassy and French Office #North Korea which are closing temporarily,” tweeted Colin Crooks, the British ambassador to Pyongyang. He added that the British embassy would remain open although other embassies in Pyongyang were temporarily closing.

“I have never been happier standing on Kim Il Sung Square,” Swedish ambassador Joachim Bergstrom tweeted last week with a selfie.

North Korea has banned foreign tourists and sharply reduced trade with China, calling its fight against the virus a matter of “national existence”. Experts have warned that the country was particularly vulnerable given its poor public health system.

Russia to sell forex reserves amid rouble slump

Max Seddon in Moscow reports:

The rouble fell to four-year lows in early trading on Monday after the collapse of Opec+ talks saw Saudi Arabia and Russia launch an oil price war, sending crude prices tumbling 25 per cent to $32 per barrel.

Russia’s finance ministry said it would spend from a $150bn war chest to boost Russia’s budget after the ruble slumped from 68 to the dollar at last close on global markets to close to 73, the weakest since January 2016. Trading was suspended in Russia due to a public holiday.

The finance ministry said it would spend foreign currency reserves in its national wealth fund to support president Vladimir Putin’s stimulus and social programs — which he sees as key to kickstart Russia’s moribund economy — while oil prices remained low.

Moscow has squirreled away surplus oil and gas revenues over a break-even price of $42 per barrel in the fund fund in recent years through a “budget rule”.

“In the case prices remain stably low, the presence of sufficient liquid assets in the NWF guarantees the government can fulfil its obligations and keep macroeconomic and financial stability,” the finance ministry said.

The $150bn national wealth fund, which accounts for 9.2 per cent of Russia’s gross domestic product, is sufficient to cover for oil prices at current levels for six to 10 years, the ministry added. If the fund’s liquid assets fall below 5 per cent of Russia’s GDP, the ministry will limit spending to no more than 1 per cent of GDP per year.

The finance ministry said it would also likely suspend government bond auctions due to market volatility. The central bank said it would suspend the budget rule payments for 30 days in an attempt to “raise the predictability of the actions of monetary authorities and lower the volatility of financial markets” after the oil price crash.

Saudi Aramco shares drop 10%

Shares in Saudi Aramco tumbled 10 per cent at the open on Riyadh’s Tadawul exchange, leaving it further below its December IPO price, after the kingdom kickstarted an aggressive oil price war.

Riyadh’s threat to discount its crude and raise production prompted brent crude, the international oil marker, to fall to as low as $31.02. It was recently down 25 per cent at $33.91.

Shares in Aramco fell 9.1 per cent yesterday. Today’s fall leaves them at SR27 ($7.46) – well blow the IPO price of R32 a share.

Germany pledges €12bn four-year investment to support companies

The German government has unveiled a package of measures to help companies hit by the coronavirus outbreak and promised a €12.4bn investment spending spree over the next four years as concerns about the virus’s impact on the eurozone’s largest economy intensify, writes Guy Chazan in Berlin.

The measures were agreed after a seven-hour meeting of leaders of the three parties in the “grand coalition” government on Sunday night.

The centrepiece of the package is a push to ease companies’ access to Kurzarbeit funds. Kurzarbeit is a government-subsidised scheme used to great effect during the 2008-9 financial crisis that enables companies to reduce staff working hours during an economic slowdown without having to lay them off. The government announced it would help companies in a liquidity crunch with export credit guarantees and tax holidays for those companies worst affected by the outbreak.

According to one poll late last week, half of all German companies expect their revenue to shrink this year, thanks to the corona epidemic. The survey by the German chamber of industries and trade (DIHK) of 10,000 companies showed that trade fair operators, hotels and companies in the tourism sector were worst affected. The DIHK demanded an immediate package of aid, including tax holidays, and easier access to state support such as Kurzarbeit funds.

But a proposal by the left-of-centre Social Democrats to bring forward the abolition of the “solidarity surcharge” for 90 per cent of taxpayers by six months was rejected by Angela Merkel’s Christian Democratic Union. The surcharge was introduced in 1991 to help pay for reunification between East and West Germany.

The parties agreed to increase federal investments in the years between 2021 and 2024 by €3.1bn a year and “enable new priorities to the tune of €12.4bn”.

European shares expected to tumble

European stocks were set to slide after a collapse in the price of oil sent new shockwaves through global markets on Monday.

Futures pointed to declines of 6.8 per cent for London’s FTSE 100, which is packed with energy companies. While futures are not always flawless indicators of how a market will perform, such a move would herald the blue-chip index’s worst day since the depths of the 2008-09 financial crisis.

Other European markets were set to post similar declines, with Germany’s Dax and France’s Cac 40 each indicated to open around 7 per cent lower.

Thailand introduces strict rules for airline passengers

John Reed reports from Bangkok

Thailand has put in place strict rules requiring airlines to check the health of passengers from South Korea, China, Hong Kong, Macau, Italy, and Iran before allowing them to board flights.

Carriers will be asked to perform health checks of passengers at check-in and passengers will be asked to present health certificates “certifying that they have no risk of Coronavirus Disease”, according to the guidelines, dated March 8 and published on Monday.

Passengers who are unable to present such certificates will be denied boarding.
The guidelines, published by the Civil Aviation Authority of Thailand, also hold airlines responsible for expenses relating to the isolation, treatment, and hospital care of people found on flights with the disease.

The tough measures come at a time when Prayuth Chan-ocha’s Thai government is under growing public criticism for its handling of the COVID-19 outbreak. The epidemic has caused arrivals to the country to fall, threatening its economically pivotal tourism industry.

Thailand last week designated the same six countries and territories “dangerous communicable disease areas”, and imposed a mandatory 14-day self-quarantine requirement for people arriving from them. The new rules set a 20,000 Thai baht ($633) fine for people who failed to comply, but there was confusion as to how the new rules would be enforced, or to which countries they would apply.

Thailand has to date confirmed 50 cases of the disease.

Europe: what you might have missed

Global stocks and government bond yields tumbled after oil prices crashed by almost a third, as the prospect of a crude oil price war hit markets already reeling from the coronavirus outbreak. Read more here.

The number of new coronavirus cases in South Korea has slowed for a third day following massive testing efforts.

Shanghai Disney said it will begin a “phased reopening” with a limited number of resort facilities, such as shops, resuming business from Monday. The number of new cases in China fell to 40 on Sunday.

Saudi Arabia has barred its citizens and foreign residents from travelling to nine countries to prevent the spread of coronavirus.

Tourism-related companies are feeling the effects of cooling demand as coronavirus spreads, with Air New Zealand and Flight Centre introducing measures to cut costs.

Australia to suffer first recession in three decades – Westpac

Jamie Smyth reports from Sydney

Australia will suffer its first recession in 29 years due to the impact of the coronavirus, according to revised economic forecasts by Westpac.

Australia’s second biggest bank by market capitalisation said on Monday it expects the economy to contract in the first and second quarters by 0.3 per cent respectively, which would constitute a technical recession.

But it expects the economy to bounce back strongly in the third and fourth quarters, which would see gross domestic product grow overall by 1.6 per cent in the 12 months to the end of December.

“That growth profile constitutes a technical recession but given the expected recovery in the second half of the year it is much more realistic to characterise the situation as a ‘major disruption’ to growth rather than the style of recession that Australia has experienced in the past,” said Bill Evans, Westpac, chief economist.

He said unemployment should hold below 6 per cent, in contrast to the unemployment rate of 11 per cent experienced in Australia’s last two recessions.

Mr Evans said the forecasts did not account for a fiscal stimulus package currently being prepared by Canberra.

Australia has enjoyed a record breaking 29 year run without experiencing recession.

Italian cruise ship to dock in Singapore after permission refused elsewhere

Mercedes Ruehl reports from Singapore

An Italian cruise ship that was rejected by Thailand and Malaysia will be allowed to dock in Singapore tomorrow.

The Costa Fortuna, which was on a 14-day voyage that originated in the city-state, has capacity for more than 3,000 passengers.

Cruise ships across Asia have struggled to dock over the past month, amid fears of the spread of the coronavirus among their passengers.

Nobody on board the Costa Fortuna has tested positive for the virus, or is suspected to be carrying it, according to the cruise line’s representatives.

However all passengers and crew will be checked by a doctor on board before being permitted to disembark, the Maritime and Port Authority of Singapore and the Singapore Tourism Board said in a joint statement.

The cruise ship was barred from docking in Phuket, Thailand, and then Penang, Malaysia.

The situation is similar to that of the cruise ship Westerdam, which criss-crossed the South China Sea in February unable to dock until it was given permission to do so in Cambodia.

Mandarin Oriental warns of hit from coronavirus

Mandarin Oriental has said it expects to be “significantly impacted” by the coronavirus, particularly in Hong Kong, and that it is “cautious” for the outlook for 2020.

“The Group’s performance is being significantly impacted by the ongoing coronavirus, particularly in Hong Kong. Results for the remainder of the year will depend on the duration, geographic extent and impact of the coronavirus and the measures taken to control it,” chairman Ben Keswick said as the group released its results for the 12 months to the end of December.

He said it was difficult to tell if the impact seen in East Asia would be repeated in other parts of the world. Tourism has shrunk in Asia as demand for overseas travel has been hit by the virus, forcing airlines to suspend routes, particularly to China.

Hotel occupancy rates in Hong Kong fell to 59 per cent in January, from 92 per cent a year earlier, government figures showed, on the effects of the coronavirus and political unrest that had scared away visitors to the territory.

Mr Kewswick said he was “cautious” as there are economic and political uncertainties in many of the hotel group’s markets. The group reported a $55m loss for 2019, against a $43.4m profit a year earlier amid lower earnings in Hong Kong as the city saw widespread protests and after the closure of The Excelsior hotel in the territory.

Saudi Arabia bans travel to 9 countries

Simeon Kerr reports from Dubai

Saudi Arabia has suspended travel to nine countries, including its immediate Gulf neighbours, as coronavirus spreads in the kingdom.

The state news agency said on Monday that citizens and foreign residents would be banned from travelling to the United Arab Emirates, Bahrain, Kuwait, Egypt, Iraq, Lebanon, Syria, Italy and South Korea.

The government also said it would stop flights to and from those countries. Airlines on Monday started to suspended operations. Etihad of Abu Dhabi said flights to the kingdom were suspended indefinitely. Dubai’s Emirates said flights through March 11 would be cancelled.

The authorities have extended the temporary ban to people seeking to enter the kingdom from those countries, or anyone who has been there in the past 14 days.

The restrictions were imposed as the ministry of health reported four new cases, including a US resident returning from a trip to the Philippines and Italy. The new cases bring the Saudi total to 15.

Tighter restrictions on travel to some of Saudi Arabia’s closest allies and economic partners come after the government on Sunday locked down the district of Qatif, north of the city of Dammam in the oil-rich eastern province.

Most Saudi cases have been recorded among residents of Qatif, where the virus has spread from individuals who had returned from Iran, the regional state most affected by the outbreak.

Aussie dollar in ‘flash crash’ as commodity-linked currencies fall

Jamie Smyth reports from Sydney

The Australian dollar experienced a ‘flash crash’ on Monday, plunging almost 5 per cent against the US dollar in just 20 minutes as the currency slumped to its lowest level since the global financial crisis in 2008.

The sell-off followed a collapse in oil prices and growing fears among investors about the possibility of a global recession linked to the spread of the coronavirus.

Several other commodity linked currencies such as the Mexican peso, the Norwegian krone and the Russian rouble also fell sharply on currency markets.

The Australian dollar, the world’s fifth most traded currency, fell from $0.66 to $0.6313 to the US dollar during a period of frenetic trading shortly after 12.30pm. It later bounced back above $0.65 later in the afternoon.

Traders said the flash crash were likely caused by algorithmic trading platforms impacting on market liquidity.

“The bungee jump characteristics of the moves don’t make sense,” said Ray Attrill, head of FX strategy at national Australia Bank.

But he said lower oil prices were bad news for the Australian dollar, due to its position as one of the world’s biggest exporters of liquefied natural gas.

Shanghai Disney resort to partially resume operations

Shanghai Disney resort today announced the first stage of a “phased reopening”, with several areas returning to activity despite the main park remaining shut indefinitely.

In a statement, the resort said:

Shanghai Disneyland remains closed as we continue to closely monitor health and safety conditions and follow the direction of government regulators. However, as the first step of a phased reopening, Shanghai Disney Resort will partially resume operations on March 9, 2020 with a limited number of shopping, dining, and recreational experiences available in Disneytown, Wishing Star Park and Shanghai Disneyland Hotel. Each of these resort locations will operate under limited capacity and reduced hours of operation.

Shanghai Disneyland has been closed for six weeks after the coronavirus outbreak took hold. Disney parks in Tokyo and Hong Kong have also closed over recent weeks as the virus has spread.

China’s biggest drug distributor issues profit warning

Primrose Riordan reports from Hong Kong

China’s biggest drug distributor, Sinopharm, said it expects its first quarter performance to “decline significantly” compared to last year in a statement to the Hong Kong stock exchange that warned on profits.

The company said its net profit declined by 50 per cent in January and February compared to the same period the year before.

The regular sale of medicines by hospitals and pharmacies has been disrupted by the coronavirus, the company said, adding that the roll out of government drug procurement policies had also dented their revenue separately.

Sinopharm said it will publish its results before the end of April.

New coronavirus cases slow in South Korea

Song Jung-a reports from Seoul

The number of new confirmed cases of coronavirus is falling in South Korea as officials step up efforts to contain the virus outbreak with aggressive testing programmes across the country.

Health officials said on Monday morning that there were 248 new infections in South Korea, bringing the total to 7,382, still the highest number of cases outside China. But the number of new confirmed cases fell for three consecutive days, although one more death took the toll to 51.

South Korea’s prime minister Chung Sye-kyun was hopeful on Monday that the country could find “an inflection point sooner or later” in the fast spread of the deadly virus in the country.

Mr Chung linked the slowing rate of increase to the fact that tests for the 210,000 followers of the Shincheonji Church of Jesus, which was at the heart of the outbreak, was nearing the end.

Health authorities said on Monday that the country can issue fines of up to Won10m ($8,307) if a person with symptoms refuses to be tested or disrupts tests. Authorities conducted a total of 189,236 tests with 171,778 of them being negative. About 17,458 tests are underway.

The government on Monday imposed a rationing system to ease shortages of face masks, limiting the number of masks each person can buy a week.

The spread of COVID-19 is also worsening the country’s relations with Japan. South Korea on Friday said it would suspend visa waivers for Japan in protest at Tokyo’s travel restrictions on South Koreans. More than 100 countries have imposed travel restrictions on arrivals from South Korea.

Earlier in the day, North Korea fired short-range projectiles of “various types” from its east coast into the Sea of Japan, despite the looming risk of a coronavirus catastrophe battering the country. The projectiles flew up to 200km with an apogee of about 50km, according to the South Korean military.

Australian stocks take biggest hit since financial crisis

Jamie Smyth reports from Sydney

The Australian share market suffered its biggest opening day fall since the global financial crisis in 2008 on Monday, as investors reacted to a slump in oil prices and the continuing spread of the coronavirus.

More than A$100bn was wiped off the value of shares in the first two hours of trading, as the ASX 200 index fell 6 per cent to 5,859.6.

Oil and gas producers bore the brunt of the sell off with Santos shedding a quarter of its value at A$4.96, Origin Energy falling 14 per cent at A$5.84 and Oil Search down 30 per cent at A$3.54 just after midday.

The moves came after the price of oil crashed 30 per cent, sending shockwaves through global financial markets.

BHP shares fell almost 12 per cent to A$28.35 while Rio Tinto fell 8 per cent to A$79.28.

Air New Zealand to cut more flights as coronavirus dents demand

Jamie Smyth reports from Sydney

Flight Centre Ltd and Air New Zealand introduced a new round of cost cuts and capacity reductions on Monday in response to a collapse in bookings linked to the coronavirus outbreak.

The move comes amid growing investor concerns about companies with high debt levels in the travel and tourism sectors.

New Zealand’s biggest airline said on Monday the financial impact of the virus would be more than it guided just two weeks ago at its interim results. The airline said it was not in a position to give a new earnings outlook.

“We have been continuously monitoring bookings and in recent days have seen a further decline which coincides with media coverage of the spread of Covid-19 to most countries on our network as well as here in New Zealand,” said Greg Foran, Air New Zealand chief executive.

In response, Mr Foran said the airline is implementing further capacity reductions, which would reduce total capacity to Asia by a quarter and domestic capacity by 10 per cent. He said the airline would defer non-urgent capital expenditure and non-critical business activity. Air New Zealand is implementing a hiring freeze, extending an executive salary freeze that has been in place since May 2019 and Mr Foran has voluntarily offered to reduce his base salary of NZ$1.65m by 15 per cent.

Flight Centre, a Brisbane-based company that is one of the world’s biggest travel agents, said on Monday it is asking employees to take unpaid leave or reduce their working hours to cut costs.

“While it’s quieter than normal, it makes sense to encourage people to take leave or to operate more flexibly,” said a Flight Centre spokesman.

“A shorter work week is one of the options that has been made available to our support and sales people over the next couple of months.”

The cost cutting in the travel industry comes as investors closely scrutinise the financial strength of airlines and related industries. Shares in Virgin Australia, Australia’s second biggest carrier, are trading at 10 year lows of just over A$0.08 following a decision by credit rating agency S&P to downgrade Virgin’s outlook to negative and warn its debt to earnings before interest, tax, depreciation and amortisation may exceed 6 times for the year ended June 30 2020.

Virgin, which held one-to-one meetings with investors on Friday, said the group retained significant financial flexibility and maintained a cash position in excess of A$1bn.

China reports 40 cases of coronavirus

Health authorities in China reported 40 new cases of coronavirus to the end of the Sunday, down from the previous day’s tally of 44. That took the total for mainland China to 80,965. Wuhan, the origin of the outbreak that has now spread around the world, reported 36 of the day’s cases.

The National Health Commission reported 22 deaths, to bring the total fatalities to 3,119.

US futures, Asia stocks slide on hit from oil and coronavirus

Hudson Lockett reports from Hong Kong

A 30 per cent crash in oil prices on Monday sent shockwaves through global financial markets already reeling from coronavirus woes.

Brent crude, the international benchmark, dropped from $45 a barrel to as low as $31.02 in one of the biggest one-day drops in its history, with traders spooked by Saudi Arabia’s decision to launch an effective price war.

US stock futures tumbled in Asian trading, with the S&P 500 expected to drop 5 per cent when Wall Street opens later on Monday and the FTSE 100 tipped to fall 3.7 per cent.

The US response to the coronavirus has received criticism for being too slow and lacking transparency as the number of cases climb in the country.

A leading White House coronavirus expert warned on Sunday that the rising number of cases in the US was making it harder to determine how people were contracting the virus, intensifying concern over people attending large events around the country.

Asia-Pacific equities fell sharply at the open, with Sydney’s S&P/ASX 200 down 5 per cent in early trading and on track for the worst one-day fall since the global financial crisis. In Tokyo the Topix fell 3.3 per cent at the open.

Investors piled into haven assets, driving the 10-year US Treasury yield down more than a quarter of a percentage point to 0.4949 per cent, a record low. Yields fall as bond prices rise. Gold jumped 1.6 per cent to $1,700.66 per ounce.

The US dollar dropped half a per cent against its international peers, with the dollar index shedding 0.5 per cent. The Japanese yen rose as much as 1.8 per cent against the dollar to ¥103.53, pushing past the ¥104 for the first time in more than three years. The euro gained as much as 1 per cent to $1.1394, an eight-month high.

N Korea fires projectiles as S Korea battles coronavirus

Song Jung-a reports from Seoul

North Korea on Monday fired three unidentified projectiles, South Korea’s military said, a week after launching two short-range missiles, raising the security threat as South Korea struggles to contain a coronavirus outbreak.

Seoul’s Joint Chiefs of Staff said the projectiles were fired from a town in North Korea’s South Hamgyong province into the Sea of Japan. It said South Korea was maintaining a readiness posture for potential additional launches.

Pyongyang last week fired two short-range missiles off the country’s east coast into the Sea of Japan. In recent days, North Korean leader Kim Jong Un has supervised live-fire artillery drills in the country’s first weapons test since late November.

The latest projectile launch comes as North Korea faces a looming risk of coronavirus catastrophe. North Korea’s state-run Korean Central Television said on Sunday the country released about 3,650 people from quarantine.

According to North Korean state media, as many as 10,000 people were placed under quarantine for symptoms of the coronavirus,which has swept through neighbouring China and is spreading fast in South Korea.

North Korea has yet to report any confirmed case of coronavirus as Pyongyang acted quickly to close its border with China after reports of the virus emerged from Wuhan in January. But analysts have warned that the country is particularly vulnerable given its poor public health system.

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