Closed Coronavirus: US cases rise to 149, CDC says – as it happened

A woman wearing a mask to prevent contracting the coronavirus stretches as she takes a walk at a Han river park in Seoul ©Reuters

Travel industry stocks on Wall Street are among the biggest decliners. Iata says passenger carriers are set to lose more than $100bn in revenue in 2020 while global cases climb towards 100,000

Australia signals it may resort to QE after economic hit from virus

Jamie Smyth reports from Sydney

Australia’s central bank forecasts the coronavirus will knock at least half a percentage point off gross domestic product in the first quarter and signalled it may have to launch a quantitative easing programme to boost the economy.

Guy Debelle, deputy governor of the Reserve Bank of Australia, told parliament the bank had capacity for only one more interest rate cut, which would reduce official rates to a new record low of 0.25 per cent.

“Beyond that, we will have to consider quantitative easing,” said Mr Debelle, who spoke to MPs late on Wednesday following the RBA’s rate cut on Tuesday, which reduced official interest rates to a record low of 0.5 per cent.

He said he did not think the RBA would consider negative interest rates.
Economists are forecasting the economy will contract in the first quarter, raising concerns that Australia could experience its first recession in 29 years if the coronavirus outbreak is not brought under control speedily.

Meanwhile, Australian authorities confirmed on Thursday that a 95-year-old nursing home resident who died on Tuesday had tested positive for the virus, making her the country’s second Covid-19 fatality.

Asia: what you might have missed

Hong Kong authorities confirmed last night that a dog which they had previously placed in quarantine has been infected with the coronavirus.

A previous test of the dog, which is the pet of a virus patient, led to the local government recommending that all “mammalian pet animals including dogs and cats” of infected patients should be quarantined.

Dublin has detected four new coronavirus cases, bringing the number of confirmed infections in the Irish republic to six. The development late on Wednesday came after Northern Ireland authorities said they were dealing with two new Covid-19 cases, bringing the total there to three.

Italy will prohibit fans from attending sporting events for the next month. Its government announced that football matches and other sporting events must take place in empty stadiums until at least April 3.

Health officials reported the first coronavirus-related death in California. The elderly adult, who had underlying health conditions, was the second confirmed case in the state’s Placer county.

The latest James Bond film, “No Time to Die”, has been delayed, becoming one of the first major Hollywood projects to postpone its launch on the back of the virus’s spread.

US forces in S Korea say two more people hit by virus

Edward White reports from Seoul

Two more people linked to the US military in South Korea have tested positive for coronavirus, the US Forces Korea said on Thursday, taking the total number of USFK-related personnel confirmed with the virus to six.

The two military dependents are stationed at Daegu, the country’s fourth largest city, which has the majority of the more than 5,000 cases confirmed in South Korea.

“USFK remains at risk level ‘high’ for USFK peninsula-wide and is implementing all appropriate control measures to help control the spread of Covid-19 and as a prudent measure to protect the force,” the US military said in a statement.

The US military last week moved to tighten access and boost health monitoring across its South Korean bases. Joint drills with South Korea were also cancelled as part of precautionary measures to protect the 28,500 US troops who are stationed in the country to defend against a potential attack from North Korea.

The South Korean military has also been hit by the virus with 28 soldiers infected and almost 10,000 personnel under quarantine.

Qantas comes under fire for exposing workers to virus

Jamie Smyth reports from Sydney

Australian health and safety authorities have sharply criticised Qantas for potentially exposing workers to the coronavirus following an investigation that showed the airline had not mandated the use of protective gear when cleaning planes.

A report by Safe Work New South Wales found the airline exposed cleaners to potential illness due to an inadequate system that might have transported people with an infectious disease. It directed Qantas to develop safe procedures to cover the risk of disease, including from the coronavirus.

The report, which has been seen by the Financial Times, said investigators observed workers “required to handle wet and used tissues, used face masks, soiled nappies and the workers advised they occasionally have to clean vomit and blood off surfaces. [Personal protective gear] was not mandated for the majority of these tasks”.

The investigator added: “I observed [cleaning crews] wiping over multiple tray tables with the same wet cloth with no disinfectant and cleaning unknown liquids on floors and surfaces. The report was compiled on February 26.

The cleanliness of planes has become a global concern due to the spread of the virus. On Wednesday US airline executives said they were taking extra measures to intensify sanitation on aircraft at a meeting with president Donald Trump.

Qantas flew two flights carrying Australian residents back from Wuhan in China last month at the request of the government.

The airline did not immediately respond to a request for comment.

Economists call for more support as S Korea cases rise

Edward White and Song Jung-a report from Seoul

South Korea’s record stimulus aimed at softening the blow from the coronavirus might not be sufficient, economists have warned.

Seoul on Wednesday unveiled a supplementary budget of Won11.7tn ($9.8bn) spread across support for small businesses and local governments, and measures targeted at boosting consumption as well as medical infrastructure for disease control.

The spending adds to an already-record high budget planned before Covid-19 started to cause widespread disruption to South Korea’s critical exporters and dent consumer demand.

The country on Thursday reported 438 new cases on Wednesday with the total number of infections rising to 5,766 and total deaths at 35, according to health officials.

Park Chong-hoon, head of research at Standard Chartered in Seoul, said further spending might soon be needed to make up for falling tax revenues as corporate earnings are hit.

“The financial cost for issuing Treasuries to fund the extra budget is low given the ultra-low interest rates globally,” he said. “The government needs to increase spending to support struggling SMEs, which will find it difficult to weather the current crisis.”

Christian de Guzman, an analyst at Moody’s in Singapore, noted Korea’s latest efforts did not represent a material deterioration in the government’s fiscal position.

“Uncertainties around the severity and duration of the coronavirus outbreak, both domestically and among Korea’s largest trading partners, pose further risks to economic growth and could prompt additional fiscal stimulus,” he said.

The Bank of Korea last week held interest rates at a record low of 1.25 per cent. But many analysts now expect to see pre-emptive easing from the country’s central bank, given the worsening economic outlook and following a cut this week by the US Federal Reserve.

Seok-gil Park, a JP Morgan economist, said: “While there is no regular rate decision meeting in March, we now expect the BoK will cut 25bp in March possibly through an inter-meeting action.

He added that another 25bp was likely during the third quarter. “Yet it is a close call depending on further developments and recovery path from the impact of Covid-19 on global and domestic demand,” Mr Park said.

Chinese reports 139 new cases of virus

China’s health authorities today reported 139 new cases of the coronavirus as of Wednesday. There were 31 new deaths, all in Hubei, the region at the centre of the outbreak.

Reported new cases in China are now emerging at a much slower rate than in South Korea, the country with the second-largest total infections, which today said there were 438 new cases on Wednesday.

Stocks rise in Asia after Wall Street gains

Hudson Lockett reports from Hong Kong

Stocks rose in Asia on the back of sharp gains for Wall Street after the US House approved an $8bn spending package to help limit the spread of coronavirus, amid signs of greater coordination from governments and central banks around the world.

Tokyo’s Topix index notched a 1 per cent rise, followed closely by China’s CSI 300 index, which gained 0.9 per cent. Hong Kong’s Hang Seng climbed 0.5 per cent while Sydney’s S&P/ASX 200 index, which dropped sharply on Wednesday, climbed 1.4 per cent.

Overnight US stocks rallied on the passage of the new bill in the House, which will allocate funds for protective equipment and bolster state and local governments’ testing and surveillance.

Sovereign bond yields, which rise as bond prices fall, underscored the risk-on mood in markets on Thursday. Yields on 10-year Australian government bonds rose 6 basis points to 0.776 per cent, while those on the equivalent sovereign Chinese notes climbed 3bp to 2.682 per cent.

The 10-year US Treasury yield dipped 4bp to 1.017 per cent, but remained safely above Wednesday’s levels.

Australia bans foreign travellers from South Korea

Jamie Smyth reports from Sydney

Australia has extended its list of coronavirus travel bans to include non-residents travelling from South Korea, as part of measures which also tightened its screening procedures for people travelling from Italy.

Scott Morrison, Australia’s prime minister, said there were five times as many visitors from South Korea to Australia, compared with Italy, which necessitated a ban rather than enhanced screening.

Australia has existing travel bans on travellers from mainland China and Iran. The tighter screening of passengers from Italy will include questioning at flight check-in and mandatory temperature checks on arrival.

“If anyone gets sick on board, bio-security and health [personnel] will meet the plane and manage those people directly,” said Mr Morrison.

“On arrival, travellers will not be able to use the smart gates. They will have to be dealt with directly by an officer.”


Facebook orders staff in Seattle to work from home

Hannah Murphy reports from San Francisco

Facebook has ordered its staff in Seattle to work from home after confirming that one of its contractors has been diagnosed with coronavirus, the first known case at the social media company.

The contractor last worked at Facebook’s Stadium East office in Seattle on February 21. The office will be closed until March 9 and staff are being encouraged to work remotely for the rest of the month.

“A contractor based in our Stadium East office has been diagnosed with the Covid-19. We’ve notified our employees and are following the advice of public health officials to prioritise everyone’s health and safety.” said Tracy Clayton, a Facebook company spokesperson.

The news comes after the company announced on Monday that only visitors for business meetings – rather than social visitors such as family and friends – would be allowed at its offices.

Earlier on Wednesday, founder Mark Zuckerberg’s charitable group, the Chan Zuckerberg Initiative, said that it had mandated remote working to allow for a deep clean of its facilities after a relative of one of its contractors was diagnosed with the virus.

The workers themselves had not been diagnosed, the charity said.

Employee at Indian start-up Paytm tests positive for virus

Benjamin Parkin reports from Mumbai

Indian payments start-up Paytm, whose investors include Softbank and Alibaba, confirmed that an employee tested positive for the coronavirus after returning from Italy on holiday.

The employee worked out of Paytm’s office in Gurgaon, a commercial suburb near New Delhi. The company has asked all its employees to work from home for “a couple of days” while it sanitises its offices, and is also asking the infected worker’s team members to get tested.

The case comes as the number of confirmed cases in India accelerates. India had only three confirmed cases as of February, but the number has now risen to nearly 30 due to a group of 16 Italian tourists who were found to be infected.

The infection of Paytm’s employee has raised concerns that the virus could disrupt the operations of Indian business hubs like Gurgaon, where many multinational corporations have their back office operations.

Paytm said that the decision to ask its employees to work from home will not have “any impact on our daily operations and Paytm services will continue as usual.”

Moody’s says securitisation defaults to rise in China

Moody’s says the coronavirus stands to affect delinquency rates on structured finance deals in China, despite default levels remaining low.

The rating agency said defaults on Chinese asset-backed securities were low in the fourth quarter of 2019, despite the country’s slowest rate of economic growth in three decades.

However, analysts expect the outbreak of the virus to impact the sector, where loans ranging from residential mortgages to auto loans are packaged together and sold on to investors.

Malaysian tycoon fortunes under pressure as virus spreads

Stefania Palma reports from Singapore

Malaysia’s weak economic growth, exacerbated by the spread of the coronavirus, is eroding the fortunes of the country’s tycoons, said Forbes as it released its 2020 Malaysia rich list.

“The wealth of the country’s 50 richest … fell for a second straight year due to a weaker ringgit and a nearly 10% decline in the country’s benchmark stock index,” Forbes said, adding that the group’s overall net worth of $79bn fell 7 per cent year on year.

Nonagenarian Robert Kuok, one of the most well-known tycoons in Asia, retained the ranking’s top spot despite seeing his wealth drop by more than $1bn to $11.5bn in the last 12 months.

Teh Hong Piow, founder of Public Bank, suffered the hardest blow in dollar terms due to a 30 per cent drop in the lender’s stock. He came in fifth after his net worth shrank $1.85bn year on year to $4.85bn.

Coronavirus’s impact on travel, as well as UK authorities last month pulling AirAsia into an Airbus bribery investigation, triggered a fall of more than a third in the wealth of airline owner Tony Fernandes and his longtime business partner Kamarudin Meranun. They sit in 41st and 43rd place, respectively. AirAsia has denied allegations of wrongdoing.

Malaysia has so far reported 50 confirmed cases of coronavirus.

Europe: what you might have missed

Australia’s central bank warned the virus would hit growth in the first quarter of the year, and pointed to the possibility of quantitative easing to stimulate the country’s economy.

Two more people linked to the US military in South Korea have tested positive for the coronavirus. They were stationed at Daegu, the country’s fourth-largest city, where the majority of South Korean cases have been reported.

Facebook ordered staff in Seattle to work from home after one of its contractors was infected with the virus, in the first known case at the US social media company.

China’s health authorities today reported 139 new cases of the coronavirus as of Wednesday. There were 31 new deaths, all in Hubei, the region at the centre of the outbreak.

United Arab Emirates urges residents to avoid travel

Simeon Kerr reports from Dubai

The United Arab Emirates has urged nationals and residents to avoid travel owing to the spread of the coronavirus, according to a statement carried by the official news agency.

The health ministry on Thursday said returning travellers would be subject to medical checks on their return at the authorities’ discretion, including the potential for home quarantine to assure lack of infection. Those who test positive for the virus would be transferred to isolation in medical facilities.

The education ministry also said any educational staff or students who returned from abroad would be tested and subject to 14 days of home quarantine.

The UAE, which has reported 27 cases, sought to assure nationals and residents that measures were being taken to stem the spread of the virus. It said thermal screening had been set up at all ports of entry. Schools and universities are to close for four weeks from Sunday.

Xi Jinping visit to Japan called off

Robin Harding reports from Tokyo

Chinese president Xi Jinping’s long-awaited visit to Japan, which was scheduled for next month, has been called off as both countries wrestle with the outbreak of coronavirus.

Japan’s chief cabinet secretary, Yoshihide Suga, announced the decision at a press conference on Thursday, following unofficial reports earlier this week. The visit is expected to be rescheduled for a later date.

Relations between Japan and China have warmed in parallel with the tensions between Beijing and Washington under US president Donald Trump. A state visit to Japan by president Xi is regarded as the next step.

Saga hit by rise in cancellations for tours and cruises

Saga, the specialist insurance and travel company, said there had been a jump in cancellations for its tours and cruise trips as the virus spreads.

It said tour bookings had seen a drop of around 20 per cent compared to last year but emphasised that a lower exposure to areas that have been worst hit by the virus – northern Europe and eastern parts of Asia – mitigated this somewhat.

In its cruise business, Saga said that despite cancellations in near term departures and a drop-off in demand for trips further down the line, its recently departed ships remained around 80 per cent full.

It said it remains too early to predict what impact the virus will have on its full year results.

ITV sees advertising hit from virus

ITV expects advertising revenue to fall by a tenth next month as the spread of the coronavirus leads some companies to put off their marketing campaigns.

The broadcaster said travel companies have been deferring advertising which had been due to run in March and April due to the outbreak, which has caused widespread disruption for airlines, cruise companies and tour operators.

ITV, the home of shows including Love Island and I’m a Celebrity, said it is too early to quantify any further impact from the disease, but expects total advertising revenue to rise 2 per cent in the first quarter.

The hit from the virus is a blow to the broadcaster, which has been struggling to win over investors as it faces a wider decline in advertising spending and the migration of audiences away from traditional television to online streaming services.

Norwegian Air cancels flights and withdraws guidance

Richard Milne in Oslo reports:

Norwegian Air Shuttle, Europe’s third-largest low-cost airline, has withdrawn its profit guidance for this year and cancelled 22 flights between Europe and the US as a result of the coronavirus outbreak.

Shares in Norwegian have more than halved in the past three weeks as investors fret that the deadly epidemic will further weaken its already stretched finances.

Norwegian said:

Given the uncertainty and ongoing impact on overall demand for air travel, Norwegian withdraws its 2020 guidance provided to the market on February 13, 2020. At this stage, it is too early to assess the full impact on our business.

It added that it had experienced “reduced demand on some routes, particularly on future bookings” in recent days due to coronavirus so it had cancelled 22 long-haul flights between Rome and the US, and London and New York from March 28 to May 5. More immediate bookings were less affected, it added.

Norwegian has already announced plans to cut its capacity this year by up to 15 per cent and it said it was “continuously evaluating additional changes to its schedule”.

Recruiters PageGroup says profits hit by virus impact on Greater China

Gross profit at recruiters PageGroup declined, squeezed by the impact of the coronavirus outbreak on its Greater China business, as slowing growth persisted into the first two months of the year.

The group expects a “significant” knock-on effect on its profit to extend into March.

Gross profit dropped 3 per cent in January and February, the recruitment group said on Thursday.

The group was hit by offices closing in some Chinese cities but added that more than 90 per cent of their consultants were back in their office by the end of last month. Still, many clients have been unable to return to work and so it expects a “significant impact” in March and “potentially beyond”.

Asia-Pacific accounts for about 19 per cent of group gross profit.

“It is too early to estimate the impact on the group’s operations” of Covid-19, the group said in a statement on Thursday. “We will continue to monitor the situation closely and will provide updates as necessary.”

The gross profit for 2019 rose 5 per cent to a record £855.5m while operating profit was up 2.2 per cent. It increased its final dividend by 4.4 per cent to 9.4p, which it says reflects confidence in the longterm “strategic process”.

Parts supplier Continental warns auto industry faces tough 2020

Joe Miller reports from Frankfurt

Continental, one of the world’s largest auto parts suppliers, has warned of a particularly tough year ahead for the global car industry, exacerbated by the coronavirus outbreak.

The passenger car market would decline by up to five per cent in 2020, the Hannover-based company said, marking the third successive annual contraction, and the worst run since the height of the financial crisis.

The Dax-constituent cautioned that it “does not anticipate any recovery in the economic environment,” adding that it expected auto production to shrink by a tenth in the first three months of the year, and by triple that amount in China, as coronavirus took its toll on sales and supply-chains.

Continental is heavily exposed to China, where it employs 25,000 people and runs more than fifty production and research sites. However the company said the full effects of the virus’ spread “cannot be gauged at the current time”.

Wolfgang Schäfer, Continental’s chief financial officer, said:

The globally interconnected automotive industry will be impacted by turbulence arising from the coronavirus epidemic, trade conflicts that remain unresolved, drastically more stringent emission regulations in Europe and the rapid digitalization of business processes and products.

As a result of this forecast, the company, which announced in September that 20,000 jobs were at risk across the group, also said it was examining “additional measures to enhance competitiveness”, details of which would be revealed in May.

European stocks rise at the open

The rebound in global stocks continued in Europe and Asia as new signs of stimulus measures in response to the coronavirus outbreak buoyed investors.

European stocks have recorded three straight days of gains this week, and the region’s main bourses all added modest rises at the open. London’s FTSE 100 rose 0.2 per cent, while Germany’s Dax was 0.4 per cent higher.

The composite Stoxx Europe 600 has gained more than 3 per cent in value so far this week as investors have welcomed the prospect of co-ordinated global stimulus to offset the worst economic impact of the virus. Still, the index tracking Europe’s largest companies is trading around 10 per cent lower than its mid-February record highs.

Hugo Boss warns of heavy blow to Asia sales

Olaf Storbeck reports from Frankfurt:

Hugo Boss has warned investors that the coronavirus outbreak is hitting its Asia operations hard and will lead to “significant sales losses” in the region.

The fashion house flagged on Thursday morning that sales and operating profits in 2020 are likely miss analyst expectations. It expects 2020 sales to grow by zero to two percent, compared to average analyst forecasts of 3.4 per cent. The company’s guidance for this year’s operating profit is 4 to 12 percent below analysts’ expectations.

Since late January, half of the group’s 150 points of sale in mainland China, Hong Kong and Macau have been closed. The remaining shops operate “severely limited opening hours and have experienced a significant decline in visitors.” Hugo Boss also said that sales in other key markets are falling noticeably at the moment.

The Asia-Pacific region accounted for about 15 per cent of group sales in 2019 and in the past year was Hugo Boss’s biggest driver of growth. In mainland China, sales grew at double-digit rates.

The company said it expected a gradual return to normality by the middle of the year and stressed the “undiminished huge mid- and long-term potential” of the Asia-Pacific region.

Cases climb towards 100,000

The number of confirmed cases of coronavirus globally has now surpassed 95,000, while more than 3,000 people have died.

China remains by far the worst affected country, with 80,410 cases. South Korea is in second place with 5,766. Italy is the third worst-hit globally with 3,089 cases, while in Iran 2,922 people have been infected.

Steve Bernard, senior visual journalist has mapped the spread:

UK health minister says country still at ‘containment phase’

Laura Hughes in London reports:

Edward Argar, a health minister, has said the UK is still at the “containment phase” of the disease and ministers will take the advice of Chief Medical Officer before moving to a “delay” phase.

His comments come ahead of a meeting of the Scientific Advisory Group for Emergencies on Thursday.

“We are still very much in the containment stage at the moment”, he said. “We are ready for the delay phase when it is necessary. He (Professor Whitty) hasn’t advised that we go for that yet”.

He will be considering a range of factors as to when he thinks is the right time to move from a containment phase to a delay phase. We stand ready as and when and, if he does, to do what is necessary.

He also said that a “whole range of options” were being considered after Downing Street confirmed on Wednesday that Parliament could be forced to close in order to halt the spread of the disease.

“This is a matter for House authorities. It will be a matter for the Speaker and the deputy speakers and the authorities to take advice from the Chief Medical Officer,” he said.

“The parliamentary authorities are taking advice on a whole range of options.”

Meanwhile, three new cases of the virus have been confirmed in Scotland, bringing the Scottish total to six and the UK total to 88.

Video: How coronavirus is hitting global business

The FT’s deputy Asia news editor Ravi Mattu explains how the Covid-19 outbreak has knocked everything from supply chains to tourism and luxury shopping, not just in China but around the world.

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Russian oil producer Rosneft latest to ban business travel

Nastassia Astrasheusk reports from Moscow:

Russia’s top crude producer Rosneft has joined the growing list of companies to ban corporate travel in light of the spread of the coronavirus

In a statement on Thursday, Roneft said:

The company has introduced temporary limitations on sending staff on business trips abroad, aside from cases justified by urgent business needs

The announcement by the company, which has headquarters in Moscow and branches across the country, comes days after the first confirmed case of the virus in the Russian capital.

The oil major’s move follows similar measures announced earlier this week by gas giant Gazprom, headquartered in St Petersburg, but with offices across the country.

India prepares to evacuate citizens from Iran

Amy Kazmin in New Delhi reports:

India has sent a medical team to Iran to screen Indian citizens stranded there by the coronavirus outbreak, as a precursor towards evacuating them from the stricken country.

Around 1,000 Indians — mainly students — live in Iran, one of the countries worst hit by the coronavirus outside China.

S. Jaishankar, India’s foreign minister, said in a tweet that Indian medical personnel had arrived in Iran and hoped to set up their first medical clinic in Qom today. The Indian doctors will carry out pre-departure medical screenings for Indian citizens seeking to be evacuated.

A lot of Indian students have tried to return home in light of the worsening coronavirus outbreak. But many flights to and from the stricken country have been cancelled, amid growing global restrictions on the entry of travellers from Iran, leading to frantic demands for help.

Indian authorities say Iranian health authorities, already overwhelmed with their own battle against the virus, lack adequate capacity to carry out large-scale medical screening of healthy Indians seeking to leave.

Since the coronavirus outbreak began in China in December, India carried out three evacuation flights to airlift citizens from Wuhan, and ferried another 119 people, mainly crew members from the stricken Diamond Princess cruise ship, back to India

However, in its evacuations, India has declined to carry those already infected with the coronavirus back to India, lest they infect others on their journey.

India on Thursday confirmed its 30th case of coronavirus in a New Delhi-area man, who had a history of travel to Iran.

European shares and US futures lower

This morning’s rally in European shares proved short-lived.

Shares turned lower in choppy trading one hour after the European open. London’s FTSE 100 fell 1.3 per cent, while Germany’s Dax was 0.7 per cent lower.

“Investors continue struggle to find the correct balance,” said Richard McGuire, head of rates strategy at Rabobank, who pointed to the tension between the fundamental concerns thrown up by the virus and the “growing appeal of risky assets in the wake of an unfolding . . . global policy response”.

The 10-year US Treasury yield fell back below 1 per cent as it dropped 0.04 percentage points. S&P 500 futures were pointing to losses of 1.5 per cent when Wall Street begins trading on Thursday, following a late surge on Wednesday after the House of Representatives approved an $8bn spending package intended to combat the spread of Covid-19.

England-Italy Six Nations rugby game postponed

Next week’s Six Nations rugby match between England and Italy in Rome has been postponed due to the coronavirus outbreak, according to the PA news agency.

The decision to put off the game comes a day after the Italian government said all sport in the country had to be played behind closed doors in a bid to contain the spread of the virus.

Italy is the worst-hit country in Europe with 3,089 confirmed cases of Covid-19 and 107 deaths.

Another Six Nations game between Ireland and Italy, due to be played this weekend, was also called off, with Irish authorities worried that the thousands of Italian fans expected to travel to Dublin could lead to a spread of the virus within the country.

Emoticon Airline industry faces up to $113bn virus hit

Disruption caused by the coronavirus could cost global airlines more than $100bn in lost revenues this year as carriers slash flights in response to the outbreak, the industry’s body has warned.

The International Air Transport Association said it now expects passenger carriers to lose between $63bn and $113bn in revenue in 2020, a much worse picture than it painted just two weeks ago when it predicted a hit of less than $30bn.

“Since that time, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China,” the Iata said in a statement.

Its new scenarios are dependent on how bad the outbreak becomes, ranging from quick containment to a broader spread of the Covid-19 virus.

Airlines have felt some of the worst economic impact of the outbreak. Carriers have cut flights and their outlooks as passenger demand has slipped, sending shares in major airlines tumbling.

The virus helped push Europe’s largest regional carrier Flybe into administration in the early hours of Thursday morning, while low-cost carrier Norwegian withdrew its financial guidance as it announced plans to cancel 22 flights.

Malaysia confirms five more cases to total 55

Malaysia takes its total to 55 as it reports five more cases of coronavirus, reports Stefania Palma in Singapore.

The cases confirmed on Thursday are linked to close contacts of someone previously infected – a senior executive at Khazanah Nasional, the sovereign wealth fund, who has generated a cluster counting 26 people, the health ministry said.

Malaysians are advised to suspend trips to the Italian northern regions of Lombardy, Veneto and Emilia Romagna; Hokkaido island in Japan; and the cities of Tehran and Qom as well as Gilan province in Iran, the ministry added.

Travellers of any nationality who have visited these locations in the past 14 days will be temporarily banned from entering Malaysia. This does not apply to Malaysian citizens, permanent residents, social or student pass holders.

Twenty-two patients have recovered and been discharged from hospital.

UK shifting into ‘delay’ phase of plan to tackle virus

Bethan Staton in London reports:

The UK’s chief medical officer has said the UK is now “mainly in the second stage” of its plan to tackle coronavirus, which means the virus is being transmitted in the UK and authorities are prioritising the “delay” of its spread.

Chris Whitty told the Commons health select committee the government was shifting its focus from containing individual cases to delaying the peak of the outbreak until the summer, when its impact would be less profound. He said the shift from the “contain” to the “delay” stage was not a “step-change” but a gradual shift in strategy.

The government is planning for the final “mitigate” stage, Professor Whitty said. This will be adopted if the outbreak continues to spread and will involve the government minimising pressure on the National Health Service and the social cost of the outbreak.

Prof Whitty said 20 per cent of people in Hubei in China, where the outbreak began, had contracted the virus, offering a guide to how far it could spread in the UK.

Modelling suggests 50 per cent of cases will likely happen during a three-week period and 95 per cent in a nine-week period — potentially resulting in high numbers of cases “way overtopping the ability of the NHS to put everyone in beds” and putting pressure on health services.

Iran begins ‘national mobilisation’ of medics to monitor outbreak

Najmeh Bozorgmehr in Tehran reports

Iran has kicked off its “national mobilisation” scheme in which 300,000 medical teams joined by voluntary members of the Revolutionary Guard will monitor families all over the country to prevent further spread of coronavirus and detect those already infected.

Saeed Namaki, Iran’s health minister, said on Thursday that the programme would initially focus on the country’s three virus epicentres — Qom, Gilan and Isfahan — where no single family will be left unchecked.

The teams will be stationed in medical centres, schools and military bases. Families will be contacted and educated on how to prevent infection. Those who are suspected of carrying the virus will be quarantined and those in need of testing will be sent to hospitals.

Should anyone try to hide an infection from the authorities, Mr Namaki said, they could face legal punishments. He also said the police and the Revolutionary Guard would tighten their control on roads and urged people not to travel, while schools and universities remain closed.

Individuals accused of smuggling 2.6m masks to China face trial in Iran

Najmeh Bozorgmehr in Tehran reports:

Iran’s judiciary has announced that it will hold open trials on Saturday of Iranian and Tajik nationals charged with trying to smuggle 2.6m face masks to China.

Iran’s Revolutionary Guards said its forces discovered a huge warehouse in southern Tehran where medical products such as surgical masks and gloves worth more than IR1tn ($23.8m) were stored.

Police said 157 people have been arrested for allegedly hoarding face masks and sanitisers at a time when pharmacies have been running out of stock.

Iran said on Thursday that the number of deaths from the virus in the country had risen to 107, from 92 the previous day. Confirmed cases have gone up from 2,922 to 3,513, making it the third-worst affected country globally, overtaking Italy.

UK still at wash-your-hands stage, says prime minister

The UK is “still at the stage where the single best thing we can do … is just wash our hands”, Boris Johnson told ITV’s This Morning, reports Laura Hughes in London.

The prime minister added: “It is always worth stressing with this that the overwhelming majority of people, this is going to be – who get it – this is going to be a mild to moderate illness.”

Questioned on whether the government was holding back information from the public about the spread of the disease, Mr Johnson replied: “No, not at all. Let me clear that up immediately because it is very important that we are transparent, people understand that we are transparent.

Public Health England needs to be absolutely sure about the diagnosis of these cases so what they are doing is they are immediately identifying the region where they think there’s an incidence and then within 24 hours confirming the exact location to be sure that we have got the right thing.

He added: “I think one of the great things about the British public is that they can see, we can all see, very clearly what the balance of risk is.

We can see where this is happening and the rate at which it’s spreading.

So, I’m with you, and we are putting it all out there.

Italy ‘likely’ to increase stimulus package to €5bn

Davide Ghiglione in Rome reports:

Italy’s deputy economy minister Laura Castelli has said that Italy could increase to €5bn the value of measures brought in to help mitigate the impact of coronavirus, as Rome stepped up its efforts to contain the largest outbreak in Europe.

“It is likely that the government will reach [€5bn],” Ms Castelli said in an interview with the Il Messaggero newspaper on Thursday.

Roberto Gualtieri, Italy’s economy minister, announced last week that the government would inject €3.6bn into the country’s economy.

Foxconn revenues tumble on virus disruption

Kathrin Hille in Taipei reports:

Hon Hai Precision Industry, the Taiwan-listed flagship of Apple supplier Foxconn, reported an 18.1 per cent drop in monthly revenue for February compared with the same month last year.

The slide confirms the company’s warning earlier this week that the disruption to economic life in China caused by the coronavirus outbreak would result in a double-digit slide in its revenue in the first quarter.

It highlights the blow that restrictions on the movement of people and suspensions of work in businesses across the country has dealt to manufacturing in China.

Foxconn, the world’s largest electronics contract manufacturer, is China’s largest private sector employer. It assembles the iPhone and a broad range of other consumer electronics gadgets, but also makes a range of electronics components and has diversified into manufacturing services ranging from auto electronics to medical devices to industrial robots.

February revenue was down to NT$217.46bn (US$7.27bn), Hon Hai said in a filing to the Taiwan Stock Exchange on Thursday, a 40 per cent drop compared with January. Year-to-date revenue totaled NT$582bn, a decrease of 14.4 per cent compared with the same period last year.

Finnair cancels more than 1,000 flights

Richard Milne, Nordic and Baltic Correspondent, reports:

Finnair has cancelled 1,100 flights due to the coronavirus, as Finland’s flag carrier revealed itself to be one of the airlines worst hit by the epidemic.

Chief executive Topi Manner said:

We already know that the coronavirus will affect Finnair significantly and that its impact will be greater than that of Sars was.

Finnair has bet heavily on flights to Asia, positioning itself as a short cut between Europe and destinations such as China and Japan.

The airline said on Wednesday that it would start talks next week with unions about temporary layoffs of 14-30 days for all its staff in Finland due to the virus. It has cancelled flights to destinations including mainland China, South Korea and Milan.

New Delhi closes all primary schools until end of month

Amy Kazmin in New Delhi reports:

New Delhi’s local government has ordered all primary schools in the Indian capital to close down until March 31, after two cases of coronavirus were confirmed in the national capital region.

Manish Sisodia, deputy chief minister of New Delhi, said in a tweet on Thursday afternoon:

The Delhi government’s decision comes amid growing panic over the coronavirus in India, where the number of confirmed cases jumped to 30 this week, including 16 Italian tourists who were on a holiday criss-crossing Rajasthan. Previously, India had just three confirmed cases, all medical students who returned from China.

As the caseload increases, hand sanitisers and protective face masks have run out at pharmacies in many parts of the capital city. However, India’s central government has not advised schools to close.

Emoticon HSBC sends home London research staff

Stephen Morris in London reports:

HSBC has evacuated dozens of staff from its office in London’s Canary Wharf after an employee reported a confirmed case of coronavirus.

The staff member, who works in the investment bank’s research department, has self-isolated and the rest of the team are now working from home, according to a person familiar with the events.

The department is on the 10th floor of HSBC’s skyscraper and the area it occupies has been cleared and deep-cleaned, the person said. The rest of floor remains open, as do the bank’s trading operations on the fourth level.

About 10,000 people work in the lender’s 8 Canada Square building. A spokesman for HSBC declined to comment.

Accountancy firm Deloitte said this week a staff member in its 1 New Street Square building in the City of London had tested positive for coronavirus following a holiday to Asia. US oil company Chevron also sent home about 300 workers from its London office last week.

Spain reports more cases

Spain now has 234 cases of coronavirus, including in the capital Madrid, Daniel Dombey writes.

Fernando Simón, the doctor co-ordinating the country’s response, said 90 per cent of the total were either cases in which coronavirus was contracted in one of the affected areas abroad or caught from someone who had come from one of those regions.

Thursday’s total represents an increase of 41 on the previous day’s tally and represents 0.4 cases per 100,000 inhabitants.

Low-cost Southwest Airlines predicts sales impact from virus

Southwest Airlines, the world’s biggest low-cost carrier, revealed it expects a $200m-$300m hit to first-quarter core sales, writes Peggy Hollinger, industry editor.

Revenue per available seat mile, a key industry measure, in the first three months could even fall on last year against expected growth of at least 3.5 per cent, the group said on Thursday.

The impact on the big US carriers, which in recent years have been the most profitable in the world, appears to be accelerating with Delta and United Airlines announcing further cuts to international and domestic capacity, reflecting the sudden and sharp drop in passenger demand in recent days.

Delta is cutting flights to Japan while United is reducing international schedules to Asia and Europe by 20 per cent and domestic capacity by 10 per cent.

Digger maker JCB to returns to normal working hours

Yellow digger maker JCB plans to resume normal production and working hours at its UK plants from Friday as the British manufacturer reported an improvement in sourcing parts from China, reports Nikou Asgari in London.

Three weeks ago, the private company cut the working week of its 4,000 workers from 39 to 34 hours as more than a quarter of its component suppliers in China remained closed. From Friday, the manufacturer will return to a 39-hour working week.

“This is not a moment for celebration, but it is a step in the right direction,” said chief executive Graeme Macdonald.

He added that the shipment of components from China has improved but “threats are emerging from our supply chain in other parts of the world, notably Italy and South Korea”.

British competition watchdog warns against price-gouging

The UK’s competition regulator has warned businesses not to use coronavirus as an excuse to rip off customers, Kate Beioley writes.

The Competition and Markets Authority said it will also consider enforcement action against companies that have charged excessive prices for goods or made misleading claims.

In response to the spread of the virus, prices of some items on online marketplaces have risen,with one vendor charging as much as £129 for a 600ml bottle of antibacterial gel on Amazon, for example.

CMA Chairman Lord Tyrie said:

We will do whatever we can to act against rip-offs and misleading claims, using any or all of our tools; and where we can’t act, we’ll advise government on further steps they could take, if necessary.

Hand sanitiser and respiratory face masks were in some cases being sold on Amazon at a more than 2,000 per cent mark up to normal retail prices this week. That came despite Amazon claiming it had removed “tens of thousands of listings” and was monitoring postings closely.

Wall Street set to slide at the open

European stock markets and US futures slid as investors struggled to weigh the benefits of new stimulus measures against the significant economic disruption caused by the coronavirus outbreak.

The composite Stoxx Europe 600 fell 1.8 per cent in early afternoon trading, unable to build on gains in Asia, where Chinese shares hit a two-year high. London’s FTSE 100 fell 1.7 per cent, while Germany’s Dax was 2 per cent lower.

Sharp swings in stock markets have become routine over the past two weeks. S&P 500 futures were pointing to losses of 2.5 per cent when Wall Street begins trading on Thursday, in what would be the eighth daily move of more than 1 per cent over the 11 trading days since the market peaked.

South Africa reports first coronavirus case

South Africa reported its first case of Covid-19, a 38-year-old man who returned to the country from Italy on March 1, Joseph Cotterill writes.

The South African case takes Covid-19 infections across Africa to 27, with most cases recorded in Algeria. Senegal and Nigeria have also reported cases. No fatalities in Africa have been recorded.

South Africa is in the southern hemisphere’s summer. Local health experts have expressed hope that temperatures of 24 to 25 degrees will be too hot for the virus to spread through its known transmission route of infected droplets.

The country has earmarked several hospitals to provide special treatment to virus cases.

The government plans a 21-day quarantine for the South Africans who will be repatriated from the Chinese city of Wuhan.

Before Thursday’s confirmed case South Africa’s authorities had tested more than 180 people.

Emoticon Wall Street tumbles at the open

US stocks fell sharply at the open as concerns over the spread of the coronavirus swept back through financial markets.

The S&P 500 fell 2.5 per cent in early trading, giving back some of the previous session’s strong gains. The Nasdaq and Dow slid by similar margins.

Airline stocks were badly hit, with several of the major US carriers falling more than 5 per cent.

Saudi Arabia confirms three more cases of coronavirus

Ahmed Al Omran in Riyadh

Saudi Arabia has confirmed three more cases of the coronavirus on Thursday, including a man who arrived from Iran via Kuwait then infected his wife.

This brings the total of confirmed cases in the kingdom to five, according to the health ministry.

The ministry also announced that a Saudi woman who has been receiving treatment in neighbouring Bahrain after returning from Iran, has fully recovered from the disease and has been released from quarantine.

Contractor at HypoVereinsbank’s Munich office tests positive

Olaf Storbeck in Frankfurt

A contractor working at one of HypoVereinsbank’s Munich offices has tested positive for the coronavirus, the UniCredit-owned German bank said on Thursday.

An undisclosed number of HypoVereinsbank employees who had been in close contact with the person were sent home for a 14-days-period of self-quarantine.

HypoVereinsbank deep-cleaned and disinfected “the relevant parts of the building”, which is located 2.5 kilometers to the west of the bank’s headquarters, and the room where the person was working will remain “closed until further notice”.

“All office buildings of HypoVereinsbank including the [bank's headquarters] in Munich as well as the branches will remain open,” the lender said in a statement.

Aeroflot suffers “big” losses due to coronavirus

Max Seddon in Moscow

Aeroflot, Russia’s largest airline, is cancelling flights to Hong Kong and suffering “big” losses because of the coronavirus.

Vitaly Saveliev, chief executive of the state-owned carrier, told Russian news agencies on Thursday that Aeroflot was considering scaling back flights to coronavirus-hit countries, but feared losing their business.

Aeroflot and Air China are the only airlines allowed to fly between Russia and China. Traffic is limited to a few flights from Moscow to Beijing, Shanghai, Guangzhou, and Hong Kong. Moscow’s Sheremetyevo airport offered flights to 29 different Chinese cities before Russia banned most flights in early February.

Chinese citizens, who drove a tourist boom in Russia and still transit in numbers through Moscow, are also barred from entering Russia in the vast majority of cases.

“We can’t just give up on routes without consequences: we’ll lose our slots, and that’s one of an airline’s biggest assets,” Mr Saveliev said, according to Interfax. “Slots are a very expensive and valuable asset, in many cases we’ve had them historically. If we lose them, they’ll be sold off very quickly.”

Aeroflot is also considering scaling back flights to Italy, the site of Europe’s largest coronavirus outbreak, Mr Saveliev added.

Italy boosts coronavirus fight funding to €7.5bn

Davide Ghiglione in Rome

Italy will increase to €7.5bn the value of measures to help mitigate the impact of coronavirus, said Giuseppe Conte, Italy’s prime minister, during a joint press conference with Roberto Gualtieri, Italy’s economy minister, as Rome stepped up its effort to contain the largest outbreak in Europe.

Mr Gualtieri added that he expects a deviation of €6.3bn from the country’s budget deficit target, around 0.35 per cent of GDP.

Measures being considered include support to families and parents who have to stay home to look after their children, an increase in national healthcare funding, redundancy benefits, measures to support businesses struggling because of the emergency.

Mr Conte also announced the decision to postpone a referendum over legislation to cut the number of MPs that was due to take place on March 29.

Quest labs to begin coronavirus tests

Quest Diagnostics, a clinical lab, is starting a coronavirus test service that will launch next week.

The US company said on Thursday it will be able to receive specimens and begin testing on March 9.

“In times of national health crises, quality laboratory testing is absolutely critical to mobilising effective public health response,” chairman and chief executive Steve Rusckowski said in a statement. “Quest’s national scale, diagnostic expertise and innovation, and relationships with half the country’s physicians and health systems is a vital complement to the efforts of the CDC and other public health labs to contend with a growing number of suspected COVID-19 cases in the United States.”

The programme will be launched under an emergency use authorisation from the US Food and Drug Administration, which has allowed some labs to start coronavirus tests prior to a formal federal review.

Quest said specimens can be collected from patients in health care settings such as hospitals and physician offices. Quest sites do not collect respiratory specimens on suspected Covid-19 cases.

Walmart cancels US customer conference

Walmart cancelled a US customer conference that was scheduled to take place in Dallas next week and is restricting international travel to business-critical trips through April.

“It seems best to cancel given the size of that meeting, plus the benefit of having our store managers present in their stores during this time,” the company said in a statement. “We will have a virtual form of the meeting to share some key points.”

The company said it would restrict all overseas travel to business-critical trips only effective immediately and that any such trip would require the approval of the executive council member for an employee’s area or in-country CEO’s for international.

Walmart will continue domestic travel related to essential operations, which includes store and club visits, but will restrict travel to conferences, trade shows and other events. The travel guidelines are effective immediately, and will be in place through April.

Google tells employees in Seattle to work from home

Peter Wells in New York and Dave Lee and Richard Waters in San Francisco

Google has told employees in its Seattle office to work from home, if possible, as the number of coronvairus cases in Washington state continue to rise.

That sees it join companies such as Amazon and Facebook, which have, to varying degrees, told Washington-based employees to work from home, if practical. 

The FT understands that guidance to Amazon’s Seattle employees as of 10pm Wednesday was that it recommended all employees in the area, which is its headquarters, to work from home if practical, and also follow general advice from county officials. Facebook has decided to temporarily shut its Seattle office completely.

One case of coronavirus in Washington is a Seattle-based Amazon employee. The state has reported 10 deaths from coronavirus as of Wednesday, out of 11 nationally.

WHO boss urges nations to take coronavirus threat seriously

Clive Cookson in London

Dr Tedros, World Health Organisation director-general, said some nations “have either not taken [coronavirus] seriously enough or have decided there is nothing they can do”.

He told a WHO briefing in Geneva: “We are concerned that in some countries the level of political commitment and the actions that demonstrate that commitment do not match the level of the threat we all face.”

Dr Tedros said preparations should “start with leadership from the top, coordinating every part of government, not just the health ministry – security, diplomacy, finance, commerce, transport, trade, information and more”.

He declined to specify the countries he had in mind but said: “There are a good number of countries who have left this epidemic up to the ministry of health and health emergency institutions. We’re saying that’s wrong. We need a whole government approach… led by the head of state or government or their deputy.”

English Premier League games could be played behind closed doors

George Hammond in London

The coronavirus outbreak is hitting Europe’s top football leagues as it spreads across the continent. Games in the English Premier League might well be played behind closed doors “in the coming weeks,” said Sasha Ryazantsev, chief finance and commercial officer at Everton Football Club.

Speaking at the FT Business of Football Summit in London on Thursday, Mr Ryazantsev said the move would “be a forced decision… nobody wants to play behind closed doors.”

Italy’s top football clubs are already counting the multi-million euro cost of a decision to play matches behind closed doors, after coronavirus cases in the country rose above 3,000, prompting the Italian government on Wednesday evening to demand that all sports matches be played without fans until April 3.

Matchday revenues account for almost 18 per cent of the total income of top European teams, the wealthiest of which now report well over €500m in annual revenues, according to Deloitte’s latest football money league report.

Leading German teams have also been affected, with Borussia Dortmund cancelling an Asian tour because of the virus. Speaking at the FT summit, Carsten Cramer, the club’s managing director, said the move would hit revenues but added that “public health is something that has to be prioritised.”

Update 18:40 GMT: The Premier League said the fair-play handshake between players and match officials will not take place from this weekend on until further notice.

Portugal confirms 9th case, national airline cancels 1,000 flights

Peter Wise in Lisbon

Portugal on Thursday confirmed three more cases of the coronavirus, bringing the total number in the country to nine. Graça Freitas, director general of health, said a man who had been in Italy was among the latest to be infected. She described the number of cases confirmed so far as “the tip of the iceberg”.

TAP-Air Portugal, the national airline, said it was cancelling about 1,000 flights in March and April due to a drop in demand caused by the coronavirus. The cancellations mainly affect destinations in Italy, but also some other European destinations, including Spain and France, where demand has dropped the most. TAP said in a statement the decision would reduce its capacity by about 4 per cent in March and 6 per cent in April.

The airline is suspending all non-critical investments, cutting non-essential spending and suspending hiring to help offset the decrease in revenue that the drop in demand implies. The group posted a loss of €105.6m in 2019.

UK reports first death from coronavirus

Laura Hughes in London

A British person with underlying health conditions has died after testing positive for Coronavirus, the NHS has confirmed.

In a statement, the Royal Berkshire NHS Trust said: “Sadly, we can confirm that an older patient with underlying health conditions has died. The patient has previously been in and out of hospital for non-coronavirus reasons, but on this occasion was admitted and last night tested positive for coronavirus.”

The NHS Trust added: “The family has been informed and our thoughts are with them at this difficult time. We will not be commenting further and ask that everybody respects the family’s privacy.”

US coronavirus cases rise to 149, CDC says

The number of US patients with coronavirus has risen to at least 149, including 10 people who have died.

The Centers for Disease Control and Prevention has tallied 49 cases among repatriated Americans and passengers on the Diamond Princess cruise ship. The 100 remaining cases include 17 from person-to-person spread and 53 whose cause remains under investigation.

The data includes figures collected by Wednesday afternoon.

California has seen the largest number of infected patients among the 13 states that have reported cases, while several deaths have occurred in the Seattle area, where a long-term nursing facility has battled an outbreak of the virus.

Russia cancels economic conference

Max Seddon in Moscow

Russia has cancelled president Vladimir Putin’s showcase economic conference in St Petersburg this June because of the coronavirus outbreak.

Deputy prime minister Andrei Belousov, who chairs the conference, told reporters that Russia scrapped the event because of the outbreaks in countries that normally send delegates.

“We have decided not to hold it this year in order to protect the health of Russian citizens and the forum’s guests and participants,” Mr Belousov said, according to Interfax. Russia has so far only confirmed seven coronavirus cases, far fewer than many developed countries.

As relations with the west worsened and US and EU companies scaled back business with Russia in recent years, Moscow’s budding relationship with Beijing visibly picked up the slack at the conference. Last year, Mr Putin hosted Chinese president Xi Jinping, accompanied by a record thousand-strong Chinese delegation — double the size of the US contingent.

Russia closed its more than 4,000km border with China in January, then stopped most flights to the country and barred entry to Chinese citizens a month later.

Prime minister Mikhail Mishustin also cancelled a similar conference in Sochi scheduled for February.

US 10-year yield plumbs fresh lows amid virus jitters

Richard Henderson in New York

The yield on the US 10-year hit a fresh low, while US and European stocks slid on Thursday as investors struggled to weigh the benefits of stimulus measures against the significant economic disruption caused by the coronavirus outbreak.

The yield the 10-year Treasury note dropped 0.15 percentage points to 0.906 per cent, a new record low, while the two-year Treasury bond, which is more sensitive to Federal Reserve target rate, fell 0.12 percentage points to 0.568 per cent. Investors now face the prospect US interest rates will fall to zero.

The S&P 500 dropped 3 per cent, led by declines in energy and financial stocks. The benchmark is on pace for its eighth daily move of more than 1 per cent over the 11 trading days since the market peaked.

Airline stocks hit as carriers warn on virus impact

Shares in US airlines were under heavy pressure after two large carriers sounded fresh warnings on the impact of coronavirus.

The Dow Jones US Airlines Index tumbled more than 8 per cent by Thursday afternoon, threatening to record its worst one-day drop in more than eight years. It was also on pace to close at its weakest level since August 2016.

Losses were severe across the sector. United Airlines fell about 9 per cent, budget carrier Spirit Airlines lost more than 15 per cent of its value and American Airlines was down 11 per cent – its largest slide since its 2013 merger with US Airways.

Southwest Airlines, which dropped 4 per cent, said today it has forecast that coronavirus will slash first-quarter operating revenue by up to $300m. The company highlighted a large increase in ticket cancellations and a decline in traffic due to the outbreak.

United told employees on Wednesday that it would cut some flights from its international and domestic schedules. It also instituted a hiring freeze, delayed merit-based salary increases and offered voluntary unpaid leave for eligible workers.

Moscow puts restrictions on residents who travelled to impacted areas

Max Seddon in Moscow

Moscow is enforcing “advanced preparation” measures to halt the spread of the coronavirus after the first case of the disease in the capital was confirmed this week.

Sergei Sobyanin, Moscow’s mayor, published a decree on Thursday ordering residents to avoid going to work or study, as well as public places “where possible”, for 14 days after returning from China, South Korea, Iran, Italy, France, Germany, and Spain. Any residents who return from countries with new infections are required to inform a special hotline and avoid medical facilities if symptoms of the virus appear.

Employers will also be required to measure employees’ temperature and allow them to work from home if necessary.

Italy tells European Commission of planned economic stimulus

Davide Ghiglione in Rome

The Italian government has told the European Commission that it plans to issue a package of support measures for the economy in a bid to mitigate the impact of coronavirus.

Rome wrote to the commission on Thursday night to inform it about its planned deviations from existing structural deficit targets. Roberto Gualtieri, Italy’s economy minister, told Brussels that the package Italy is about to legislate is worth €6.3 billion in terms of impact on the general government deficit.

“The Coronavirus Covid-19 has suddenly hit Italy very hard over the past two weeks. The government and regional authorities have given priority to the protection of citizens’ health by locking down the infection clusters and by putting in place a series of preventive measures that affect broader regions and, in some respects, the entire country,” Mr Gualtieri wrote, adding that “a number of sectors of our economy, including transportation, lodging, tourist services, entertainment, cultural activities and trade fairs will suffer as a result … The economic fallout will be broad and we cannot accurately predict its duration at this stage.”

Italy is struggling to halt the spread of a virus that has killed 148 people in the country and infected more than 3,200. Eleven towns in Italy’s wealthy north — and their 50,000 residents — are under lockdown while public gatherings and sporting events have been banned in the most affected regions.

Measures being considered include support to families, financial resources for the wage supplementation fund, financial assistance to the most affected sectors and firms, an increase in national healthcare funding, redundancy benefits and measures to support businesses struggling because of the emergency.

“The package we are about to legislate is worth €6.3 billion in terms of impact on the general government deficit. Last September Parliament authorised a general government deficit of 2.2 per cent of GDP in 2020. If Parliament approves the additional expenditure, the deficit projection for 2020 will rise to 2.5 per cent of GDP,” Mr Gualtieri wrote.

The letter follows the official announcement made earlier on Thursday by Giuseppe Conte, Italy’s prime minister, and Mr Gualtieri in a joint press conference from the prime minister’s office.

Senate sends $8.3bn emergency funding bill to Trump

James Politi in Washington

The US Senate voted to approve $8.3bn in new funding for America to tackle the expanding coronavirus outbreak, sending the legislation to Donald Trump for his signature.

The emergency spending bill had already passed the House of Representatives, which is controlled by Democrats, earlier in the week, as lawmakers and the administration grew increasingly concerned about the disease, which has claimed more than 10 lives across the country, with at least 149 cases reported by the Centers for Disease Control and Prevention. The funding boost is mainly for federal agencies to improve their response to the crisis, but is far from a large-scale economic stimulus measure to offset the economic harm inflicted by the outbreak.

Rand Paul, the Kentucky Republican, was the only senator to vote against the measure, with 96 lawmakers from both parties voting to approve it.

Pentagon finalising plan to counter spread of coronavirus

Katrina Manson in Washington

US defence secretary Mark Esper told reporters that he met with senior leaders and combatant commanders for 90 minutes on Thursday morning to discuss DoD reponses to coronavirus in order to protect the Pentagon building and other US military installations should the virus spread.

He said he would receive a finalised plan next week and would expect to implement measures shortly afterwards, citing learning from the experiences of US forces in South Korea, including “simple things” such as frequently wiping down door knobs and coffee machines among other prevention measures.

“This will be coming up to me next week,” he said of the coronavirus prevention plan.

European Parliament cancels plans for Strasbourg session

Jim Brunsden in Brussels

The European Parliament has cancelled plans to travel to Strasbourg next week for its plenary session, saying the spread of coronavirus presents too great a risk.

In an internal email to staff, president David Sassoli said that the assembly would stay in Brussels, on the grounds that “the journey to the part-session of Parliament in Strasbourg would involve significantly higher health risks for Members and staff as well as the local population”.

The parliament’s leadership had wavered for days over what to do, with the French government extremely keen for the session to go ahead.

Mr Sassoli said that the decision was based on updated medical advice.

US does not currently have enough testing kits – Pence

Mike Pence, who has been tasked with coordinating the Trump administration’s national response to the coronavirus, has conceded the US does not at present have enough kits to test for the disease.

“We don’t have enough tests today to meet what we anticipate will be the demand going forward,” the vice-president told reporters while visiting the headquarters of mask- and Scotch tape-maker 3M in Minnesota on Thursday.

“For those who we believe have been exposed, for those who are showing symptoms, we’ve been able to provide the testing,” he continued. “But as more Americans take an interest in this or have concerns about this, we want to make sure they have access to a coronavirus test as well and we’ve made real progress on that in the last several days.”

Mr Pence thanked 3M for increasing production of its N95 respirators, a type of facial mask favoured by health care workers during the coronavirus outbreak. He said the Trump administration would work with Congress on extending legal protections, under the public emergency President Donald Trump has declared, for 3M and other manufacturers to sell another type of mask.

“We are ready today, but we want to be ready tomorrow,” he said when asked about the mask shortage. “As we are expanding testing around the country there are going to be more cases. We’re going to find more Americans have contracted the coronavirus.”

Heightened concerns globally about the disease have led to some consumers hoarding N95 and other masks, leading to supply shortages. Health authorities have said that while masks are helpful for stopping infected persons spreading it to others, they will not necessarily protect healthy people. Mr Pence has called for healthy people to not buy or hoard masks.

San Francisco reports first coronavirus cases

Hannah Murphy in San Francisco

Two San Francisco residents have tested positive for coronavirus, city officials said on Thursday, marking the first known cases to be confirmed in the city.

According to a statement from the mayor, two unrelated patients were diagnosed with the virus following tests by the San Francisco Department of Public Health lab.

One, a woman in her forties, is said to be in fair condition. The other, a man in his nineties with underlying health conditions, is in a serious condition. Both have not had known contact with a person with the virus or traveled to a location with confirmed cases. The two patients are being cared for at separate hospitals.

“We want everyone to remain calm and continue taking precautions to keep themselves and their families healthy,” said the city’s mayor, London Breed.

“We have been increasing resources and staffing to prepare for the community spread of this virus, and we will do everything we can to protect public health. The City is in regular contact with all hospitals and health facilities in San Francisco, and our health system is prepared to deliver care to everyone in need and provide a coordinated response as additional cases of the novel coronavirus are confirmed.”

Separately officials said they were beginning tests on certain passengers and crew of the Grand Princess cruise ship, which remains at sea after an earlier passenger who had already disembarked died from the virus in California.

“Once that has happened, the CDC and the state will determine the most appropriate location for the ship to berth to provide for the safety of the surrounding community as well as the passengers and crew,” the statement said.

Sequoia tells start-up execs to prepare for virus driven downturn

Miles Kruppa in San Francisco

Sequoia Capital, one of Silicon Valley’s most storied venture firms, on Thursday urged start-up executives to prepare for an economic downturn resulting from the spread of coronavirus, signaling technology investors are growing wary of business impacts from the global health crisis.

The advice came in a memo sent to the founders and chief executives of US companies backed by Sequoia. Titled “Coronavirus: The Black Swan of 2020”, the letter cited “challenges” resulting from the virus outbreak, including a drop in business activity, supply chain disruptions and curtailed travel.

“It will take considerable time — perhaps several quarters — before we can be confident that the virus has been contained,” Sequoia wrote in the memo, which was viewed by the Financial Times. “It will take even longer for the global economy to recover its footing. Some of you may experience softening demand; some of you may face supply challenges.”

It continued: “While The Fed and other central banks can cut interest rates, monetary policy may prove a blunt tool in alleviating the economic ramifications of a global health crisis.”

The letter recalled Sequoia’s famous “R.I.P. Good Times” presentation during the financial crisis of 2008, which urged start-ups to preserve cash and prepare for tighter capital markets.

Sequoia said “several companies” were now at risk of missing their first quarter business targets after facing declining growth between December and February.

The firm’s investments include the food delivery company DoorDash and travel business Airbnb, both of which are expected to go public this year.

Sequoia suggested that companies “question every assumption about your business”, including cash reserves, fundraising plans and spending levels.

“Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances,” Sequoia wrote. “In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology.”

US stocks slide as 10-year yield drops to fresh lows

US stocks fell more than 3 per cent in another volatile day on Wall Street, as investors remained unnerved by the coronavirus outbreak.

The S&P 500 closed 3.4 per cent lower, its fourth drop of at least 3 per cent in the last 11 sessions. The industrial sector led the sell-off, while financials also tumbled alongside fresh lows for US Treasury yields. The Dow fell 3.6 per cent, and the tech-heavy Nasdaq Composite shed 3.1 per cent.

The yield on the 10-year Treasury note was down 8.2 basis points to 0.91 per cent, after hitting a new record low of 0.899 per cent, with investors ramping up bets the Federal Reserve will cut interest rates at its regular policy meeting in mid-March. The central bank delivered an emergency rate cut on Tuesday.

Business Roundtable sets up task force to improve coordination with US government

Andrew Edgecliffe-Johnson in New York

The Business Roundtable, the voice of big business in Washington, is postponing a CEO conference and forming a task force to try to improve coordination with government in response to the coronavirus outbreak.

US executives have been juggling employees’ concerns, supply chain disruptions and uncertainty about the impact of the outbreak on economic conditions.

Josh Bolten, CEO of the BRT, said its members “remain confident in our country’s ability to address challenges raised by the outbreak and urge Americans to continue to act with prudence and preparation”.

The new task force, designed as “a forum for coordination between the private sector and the US government”, will be led by Arne Sorensen, chief executive of Marriott International, the hotelier, and Lance Fritz, chief executive of Union Pacific, the rail operator.

The group had planned an innovation summit in Washington for March 18, featuring CEOs from Adena Friedman of Nasdaq to Doug McMillon of Walmart. It rescheduled the event for an unspecified later date “out of an abundance of caution”.

Dublin uncovers 7 new cases

Arthur Beesley in Dublin

Dublin has uncovered seven new coronavirus cases, taking to 13 the total number of infections as the Irish republic reported its first case not directly linked to travel in northern Italy. Confirmation late on Thursday of the new cases follows the discovery of four infections on Wednesday.

The authorities said they did not know how a hospital patient in Cork in southern Ireland contracted Covid-19, in the country’s first case of community transmission. Neither travel in Italy nor exposure to another known case could explain the infection, said Dr Tony Holohan, chief medical officer in the health ministry.

“Ireland remains in containment phase,” he said, adding that a “national effort” was required to tackle a rapidly evolving situation. Four of the new cases — males in the east of Ireland — were related to travel in Italy. Another two — females in the west of the country — were linked to “close contact” with a confirmed case.

The disclosure of the latest infections came after health officials said they expected Covid-19 “will be spreading within our communities within weeks”, as Dublin prepares for a sharp coronavirus escalation. Leo Varadkar, outgoing prime minister, said the government recognised that workers required to self-isolate in line with medical advice “should receive income support”.

Starbucks reopens most China stores, but flags $430m revenue hit

Starbucks expects a hit to its China revenues of up to $430m, leading to a reduction in second-quarter group earnings, following the temporary closure of many of its stores on the mainland as the coronavirus outbreak grew in scale.

More than 90 per cent of its stores in China are now open, the company said in an update on Thursday afternoon, but operating under elevated safety protocols, or in some cases with reduced hours or delivery-only service.

The company said in late January that due to a combination of the coronavirus and lunar new year that it had shut about half of its 4,300 cafes in China. Today, it clarified closures peaked at 80 per cent.

Starbucks forecasts comparable sales, a key industry metric, will be down 50 per cent in the second quarter compared with the prior year, while they were previously expected to be up 3 per cent. That represents a hit of $400m to $430m to China revenue during the current quarter.

The business disruption in China is expected to shave between 15 cents and 18 cents from Starbucks’ reported and adjusted earnings, the company said. Analysts forecast reported earnings of 57 cents a share.

“To date, there are no perceptible signs of Covid-19 impact on our US business,” Starbucks said.