Global markets continue to slide on coronavirus fears

Well, that's all folks, thanks for following along. Join us again tomorrow for all the latest news of what's moving markets. Here's a quick recap for today...

European stock markets fell further amid health concerns on the spreading coronavirus and the its impact on the global economy. More deaths and a surge in cases in Iran, Italy, Japan and South Korea has raised the risk of a pandemic. The FTSE 100 index ended the day at its lowest closing level in a year.

What to look forward to tomorrow:

Interim results: Metro Bank, Revolution Bars

Full-year: Avast, Law Debenture Corp, McColl’s, Restaurant Group (The), Rio Tinto, Serco, Taylor Wimpey, Weir Group, William Hill

Preliminary: Capital & Counties Properties, Nichols, Unite Group

Economics: New home sales (US)

The New York hedge fund that called for Prudential to break up its business and ditch its UK headquarters has conceded the company could remain listed on the London stock market under its plans, my colleague Michael O'Dwyer writes. 

Third Point would be prepared to accept the FTSE 100 insurer’s Asian arm being dual-listed in Hong Kong and London, most likely with a secondary listing in London, sources close to the hedge fund said. 

A dual listing would allow London investors to continue to buy and sell shares in the £37bn insurer. 

Pensioners and investors in passive funds linked to UK indices such as the FTSE 100 and FTSE All-Share would retain exposure to the company. 

Fast-fashion website PrettyLittleThing, owned by Boohoo, is moving offline with the launch of a cafe.

Chief executive Umar Kamani, who co-founded the online retailer with his brother Adam, is poised to open the first venue, featuring pink sofas, stools and a bar, in Dubai.There are no plans to have one in the UK, for now.

Boohoo, which was co-founder by Uman and Adam's father, bought a majority stake in PLT in 2016 for £3.3m.

Two of Kazakhstan’s largest businesses are mulling a float on the London Stock Exchange as enthusiasm returns to the market following a slump in listings last year.

The national Kazakh oil champion and the firm behind the country’s third largest lender are both plotting to go public in Britain.

Kaspi.kz, which controls the finance group Kaspi Bank, is expected to sell shares worth as much as $700m (£538m), Reuters reported. 

The Goldman Sachs-backed central Asian company could kick-start the process as early as next week, aiming to float in March or April. 

Meanwhile state-run oil and gas giant KazMunayGaz said on Tuesday that it plans to float its shares during the second half of this year. 

Both companies are thought likely to list on the main market rather than the junior Aim exchange.

Read Vinjeru Mkandawire's full article here

The FTSE 100 closed at a one-year low today, slumping 1.94pc to 7,017.88 while the wider FTSE 250 closed 1.90pc lower at 20,715.97 amid continued health fears.  

David Madden of CMC Markets said: "The colossal losses that were racked up yesterday encouraged some bargain hunting at the start of today’s session, but that old concerns crept in, hence why we are offside again.

"The coronavirus fears have gripped European stocks as dealers are worried that this part of the world could go down the Wuhan route in terms of being on lockdown.

"Yesterday, Europe-focused airlines like easyJet and Ryanair posted painful losses, and they are in the red again today, and that tells you everything you need to know about tourism sentiment."

Crispin Odey's hedge fund has hiked its stake in failing fertiliser firm Sirius Minerals and confirmed it will vote against a rescue plan by Anglo American unless the mining titan raises its offer, my colleague Ed Clowes writes.

The tycoon's Mayfair-based fund last week called Anglo's £405m offer a "mockery" which does not represent fair value for Sirius - becoming an unlikely crusader for 85,000 retail investors facing huge losses if the takeover goes ahead.

Odey Asset Management now owns 1.4pc of Sirius and has locked in a vote against the rescue deal at a shareholder meeting on March 3.

However, only a small percentage of Odey's 1.4pc stake are actual shares in Sirius that the company can use to vote. Most of the company's shares are held as derivatives, which do not entitle the owner to a vote.

Sirius is on the brink of collapse after it failed to secure funding for ambitious plans to dig up polyhalite 820ft below the North York Moors.

Stocks across the pond have extended their losses, with the Dow Jones down 1.09pc and the benchmark S&P 500 falling 1.32pc. The tech-heavy Nasdaq is 1.11pc behind.

Dr Kerstin Braun of Stenn Group says: "The WHO’s director general, Dr Tedros Adhanom Ghebreyesus, might have played down the term pandemic for now, but the effects of the coronavirus on global economies are unavoidable."

The top 10pc of UK earners are almost £10,000 a year better off than previously thought, statisticians have found.

The Office for National Statistics has struggled to measure the income of wealthier people accurately until now because they are less likely to respond to surveys.

But using tax data from the HMRC, the ONS found that the top 10pc earned an average £97,600 in 2017-18 - up from previous estimates of £87,700.

The new estimates also widen the gap between rich and poor as measured by the so-called Gini co-efficient, where 0pc represents total income equality and 100pc would mean one person owning all the wealth in an economy.

The changes have added an average 2.4 percentage points to income inequality since the financial crisis, according to the ONS, raising the Gini from 32.4pc to 34.8pc. The average UK worker earned £29,400 in 2018/19.

Read Russell Lynch's full article here

It's been another tough day for equities.

With just over 30 minutes to the close, European stocks are becoming increasingly bearish:

• FTSE 100 -1.91pc
• Stoxx 50 -1.8pc
• DAX -1.54pc
• CAC 40 -1.68pc

That's all from me for today. LaToya Harding will take over for the rest of the evening. Thanks for following. 

In an almost mirror image of Europe this morning, US markets have fallen into the red about an hour after the open.

• Dow Jones -0.56pc
• S&P 500 -0.65pc
• Nasdaq -0.52pc

Meanwhile, 10-year Treasury yields resumed a push to record-low levels. 

Struggling bathroom retailer Soak.com has fallen into administration after failing to find a buyer for the company. 

My colleague Vinjeru Mkandawire reports:

Restructuring specialist Leonard Curtis had been seeking offers for the business in a last-ditch attempt to avoid administration. 

Around 200 people have been made redundant without pay, while customers have been left without their orders after couriers stopped delivering packages, sources said.

Leonard Curtis did not immediately respond to requests for comment. Soak.com was not available for comment. 

It follows previous attempts by accountants BDO to sell Soak.com less than a year after it was spun out of London-listed plumbing and heating supplier Ferguson, and sold to former Boohoo executive Christopher Bale.

Soak.com had annual sales of £43m, down from just over £70m for the year ending in July 2018.  

Hotel Chocolat saw its Valentine’s Day treats fly off the shelves in Japan, a fledgling market for the posh chocolatier. 

My colleague Laura Onita reports:

The tradition is for women to give Giri choco - small chocolate gifts - to male friends and colleagues on February 14, and men reciprocate the gesture a month later on White Day. 

“We’re increasingly confident [in Japan],” said Angus Thirlwell, chief executive and co-founder, who opened the first shop in Japan two years ago. 

“Valentine’s Day was a big success. It’s about respect for work colleagues in a platonic sense.” 

Hotel Chocolat also started selling biscuits partly-covered in chocolate in Japan, which it is now selling in the UK - its main market - and the US, where it is also expanding

It came as the retailer posted a 14pc increase in revenues to £91.7m for the six months to the end of December, while pre-tax profits increased 7pc to £14.9m.

US traders have shrugged off the coronavirus fears weighing on European stocks to open in the green.

• Dow Jones +0.45pc
• S&P 500 +0.37pc
• Nasdaq +0.59pc

Tesco has announced it will cut more than 1,800 jobs as part of changes to its in-store bakeries.

We are less than 20 minutes from the US open and here is how markets are looking:

Europe remains a sea of red as the coronavirus continues to weigh on equities. Austria confirmed its first two cases of the disease, while a hotel in Tenerife was put on lockdown after an Italian guest tested positive for the virus. 

However, things are looking a bit brighter on the other side of the pond with US futures pointing higher. 

Tesco is poised to exit China for good after it offloaded a remaining £275m stake in an ‘overlooked’ part of the business abroad. 

My colleague Laura Onita reports:

It sold a 20pc chunk of Gain Land, a joint venture it set up in 2014 specifically to help it retreat from the market, to its partner China Resources Holding. 

The grocer took a major step back six years ago when it realised that its ambitious plans to do business in China was in fact not worth pursuing.  

The cash it will get in return will go towards “general corporate purposes”, the company said on Tuesday.  

The move represents “another step in the geographic retrenchment”, said Clive Black at broker Shore Capital, while it focuses on being more disciplined with its money rather than growth. 

More bad news for Bernard Arnault today. 

Luxury-goods stocks from LVMH to Swatch look set for a rough ride this year after a survey showed industry executives expect a severe fallout from China’s coronavirus.

The impact of the outbreak is likely to reduce industry sales by as much as €40bn (£33.4bn) in 2020, according to the survey of 28 top executives undertaken by Boston Consulting Group and Sanford C. Bernstein.

Investors should brace for “a gap year” for the sector, Bernstein analyst Luca Solca wrote in a note.

The regional divide is to widen as London and the south outpace northern economies again.

My colleague Tim Wallace reports:

Boris Johnson’s plan to ‘level up’ the UK and its regions faces serious challenges, with the richer economies of London and the south east set to grow significantly faster than northern areas.

Towns in the north east, Yorkshire and the Humber, and the West Midlands are expected to be the slowest-growing areas over the next three years, according to economists at EY.

By contrast their counterparts in the south east and the east of England will grow almost twice as quickly.

As a result London and the surrounding regions will extend their lead over the rest of the country, highlighting the difficulty of closing the prosperity gap.

Read full story here

Shopping centre owner Hammerson has slashed its dividend in a bid to shore up its finances after the value of its properties fell by 16pc. 

My colleague Rachel Millard reports:

The value of its portfolio, which includes the Bullring centre in Birmingham, dropped to £8.3bn during a year in which retailers were hammered by competition from online shopping, business rates and employment costs. 

Thirty-three of Hammerson's retail tenants either went into administration or restructuring during 2019.

Chief executive David Atkins said the fall in valuations had further to run and they were taking a hefty cut to the dividend now to avoid "chipping away" at it in months to come.  

Nearly 50 jobs are at risk at HSBC branches across the country, as the bank revealed plans to close 27 sites this year.

Staff in 10 branches, which employ 46 people between them, could face losing their jobs under the closures.

However, those working at the other 17 branches earmarked to shut will be moved to other roles at nearby HSBC sites, the bank told the PA news agency.

The records of 1,600 people who complained to the City watchdog have been exposed following a major data breach at the regulator.

My colleague Adam Williams reports: 

The Financial Conduct Authority (FCA) mistakenly published the personal records of complainants on its website, where anyone could access the information.

The data was visible between November 2019 and February 2020 and included the records of people who made a complaint between January 2018 and July 2019.

This leaked information included the name of the complainant, the company they represent, the status of the complaint and other information. In some instances addresses and telephone numbers were also visible.

Telegraph Money can disclose that the list contained the names of several high-profile individuals. 

It is understood that those who had significant personal details exposed – around half of the people on the list – will be contacted directly by the regulator. The FCA has apologised to all those affected.

Moving away from virus fears for a moment, Donald Trump has been addressing CEOs in India...

The US president has claimed stock markets will crash if he loses in November but reach new highs if he is re-elected.  US stocks have risen 40pc since Trump won in 2016.

Read Matthew Lynn's piece here about how markets must wake up to Bernie Sanders' bid for presidency. 

The London-based World Travel and Tourism Council (WTTC), has called for governments and authorities to avoid blanket travel bans and other "extreme" measures in an attempt to stop the spread of the coronavirus.

Airline and travel stocks have been among the worst hit over the last two days amid fears there could be a travel crackdown on the continent after Italy emerged as the biggest coronavirus hotspot outside Asia.

The Chinese economy is unlikely to return to full-capacity before the third-quarter, according to Neil MacKinnon, global macro strategist at VTB Capital. 

Mr MacKinnon said: 

The fact of the matter is that the virus has spread outside of China and is present in the major economies. China is still in lockdown and the economy is 50pc operative, according to estimates from Bloomberg.

Once travel restrictions inside China are lifted there is a risk of the virus increasing again and/or a reluctance of people to return to work. This looks like more of an ‘L-shaped recovery’ as far as the Chinese economy is concerned and full-capacity working is unlikely to happen before the third quarter.

The ramifications are certainly global, given that China has accounted for a third of global GDP growth over the past decade. The disruption to global supply chains and disruption to trade and investment flows is considerable.”

Europe is now comfortably in the red as investors continue to move out of equities and into safer assets.

Gold has started to edge higher after an earlier decline. 

Ouch. The world's 500 richest people lost a combined $139bn (£107bn) on Monday as markets tanked amid coronavirus fears.

Bernard Arnault, chairman of luxury-goods maker LVMH, and Amazon founder Jeff Bezos led the declines, each losing more than $4.8bn, according to Bloomberg data.

It was the biggest wealth drop for the group since the Bloomberg Billionaires Index began tracking that figure in October 2016. 

M&G's frozen flagship UK property fund is to cut its retail holdings to 32pc from 38pc as it raises cash to meet potential redemption requests.

Retail accounts for 80pc of assets the fund has sold or is "on course to exchange".

Tony Brown, global head of M&G Real Estate, said the market is "more liquid" than last year. 

• Dow Jones +0.34pc
• S&P 500 +0.37pc

Online retailer Boohoo needs to improve its environmental and social credentials to avoid becoming a "poster child for a potential consumer backlash against fast fashion", according to a Citi analyst.

Adam Cochrane said that while the company has been an "incredible success story", the main risks for the stock include whether Boohoo can improve its sustainability track record.

The rally was short-lived. All major European indexes have now reversed earlier gains and are trading in the red, driven by a decline in carmakers and banks. 

• FTSE 100 -0.2pc
• Stoxx 50 -0.13pc
• DAX -0.04pc
• CAC 40 -0.1pc

Tony Wood, the chief executive of UK aerospace manufacturer, has said he is "cautious but surprisingly upbeat" about the coronavirus.

The company has 375 employees in China and, as of last week, 80pc were back at work. 

"Most of the disruption has been on the logistics side, getting parts onto planes and out of the country into build lines around the world," said Mr Wood. 

It came as the company warned of hit to growth from the halt in production of Boeing 737 MAX. Sir Nigel Rudd, Meggitt's chairman, is also stepping down. 

Shares fell 3.8pc to 571.6p. 

Shares in building materials maker SIG have plunged 11.7pc, making it the biggest faller on the FTSE 250, after the sudden departure of the company's CEO and CFO.

SIG has appointed former Patisserie Valerie chief Steve Francis on an initial contract until the end of the year. 

Priyal Woolf, an analyst at Jefferies, said the resignations were "highly unexpected".

She added that the departures mark the "end of the road for yet another management team unable to turn SIG around after coming in with high expectations". 

Prudential is leading the FTSE 100 after an aggressive New York hedge fund built a near-5pc stake in the insurer and demanded a separation of its US and Asian businesses

Shares in the insurer have jumped 2.6pc to £14.58 in early trading. 

My colleague Michael O'Dwyer reports: 

Third Point is calling for the British blue-chip to split its US life insurance business Jackson from its high-growth Asian operations, arguing Prudential is heavily undervalued because the two arms are tied together.

The hedge fund's billionaire founder Daniel Loeb - whose previous successes include ousting the boss of Yahoo! - also took aim at the firm's London listing in a letter to its board on Monday.

Mr Loeb said management should “identify listing venues where the standalone businesses will receive the attention they deserve, and which provide the optimal shareholder base to support necessary reinvestment and the future growth strategy of each company”.

Markets are looking a bit different this morning. European equity indexes have opened in the green, paring some of Monday's massive losses, despite growing fears that Japan is on the verge of a rapid expansion of coronavirus cases.

Japanese shares tumbled more than 3pc as traders returned after a holiday, though the decline was less than the two-session slide on Wall Street while they were away.

Stocks slipped in China and Australia and pushed higher in South Korea and Hong Kong. Ten-year Treasury yields rose from near record lows and crude oil pared some of its near-4pc drop on Monday.

A surge in cases in South Korea and Italy, along with the disease’s spread in Japan, spooked investors Monday, but the World Health Organization has held off from calling a global pandemic.

Some may also be taking encouragement from news about the development of treatments or a vaccine, even if experts warn about the time it would take to build significant stocks of medicines.

Fujifilm jumped as much as 8.8pc on Japanese plans to recommend its Avigan drug as a treatment.

Europe is set to open higher after it recorded its worst day in more than three years on Monday. 

The number of confirmed coronavirus cases worldwide jumped above 80,000 overnight as deaths rose to 2,700. 

An expert panel also warned that Japan is on the brink of a rapid expansion in its number of cases. It came as virus hot spots emerged in Italy, Iran and South Korea, triggering the market selloff. 

Clothing giants such as Nike and Adidas could be hit by the impact of the coronavirus on Vietnam's garment industry.

Nike, Adidas, Patagonia, North Face, H&M, Uniqlo and Gap all manufacture clothes in Vietnam where supply chains could be harmed given that more than 50pc of the country's clothing materials are imported from China.

Vietnamese garment makers will face a severe shortage of materials in the second quarter, Vu Duc Giang, the chairman of the Vietnam Textile and Apparel Association, said on Tuesday.

"Domestic firms have sufficient materials for production until the end of the first quarter, but many of them will face severe shortage of materials from the second quarter because they have trouble importing materials from key suppliers in China, Japan and South Korea," Mr Giang said.

Garments and textiles are Vietnam's third-largest export earner, after smartphones and electronics. 

The Japanese government on Tuesday urged companies to recommend working from home and staggered shifts for workers in a bid to curb the spread of the new coronavirus.

The plan, approved at a cabinet meeting on Tuesday, also urged people with symptoms of cold or fever to stay at home and asked event organisers to carefully consider whether to proceed with their plans.

Authorities hope that working online or from home would reduce the infection risk driven by contact.

Stocks in Hong Kong edged down Tuesday morning on concerns about the impact of the coronavirus on the global economy, though losses were tempered by bargain-buying following a three-day retreat.

The Hang Seng Index dropped 0.08 percent, or 21.74 points, to 26,799.14 by the break.

Bargain-buying helped to claw back some of the losses in Asian markets on Tuesday morning but the damage from coronavirus fears looks set to continue today.

Tokyo led losses as markets reopened to play catch-up with Monday's global sell-off.

The Nikkei ended the morning three per cent lower, while Sydney and Wellington each shed 1.3 per cent and Shanghai lost 0.9 per cent.

Taipei and Jakarta were also lower. However, Hong Kong rose 0.2 per cent and Seoul added 0.6 per cent having plunged almost four per cent Monday in reaction to a spurt of infections in South Korea at the weekend.

Donald Trump is asking Congress for $2.5 billion to fight the coronavirus, including more than $1 billion for vaccines, the White House has said on Monday.

“The Trump administration continues to take the spread of the COVID-19 Coronavirus Disease very seriously," a spokeswoman for the White House Office of Management and Budget said. "The administration is transmitting to Congress a $2.5 billion supplemental funding plan to accelerate vaccine development, support preparedness and response activities and to procure much needed equipment and supplies," 

The money will be also used for therapeutics and the stockpiling of personal protective equipment such as masks, the White House said.

The collapse in global markets on Monday will be rectified by a speedy return to form, the IMF has insisted, but Russell Lynch doubts their confidence in a "rapid, V-shaped" recovery:

"The coronavirus landed almost exactly at the point when growth, at its lowest ebb for a decade last year, was thought to have bottomed out... Before long the Bank of England and other central banks could be dealing with a “stagflation” headache of rising prices and subdued demand, but weak productivity may prevent monetary stimulus."

Read more: Stock market selloff is just the start of Europe's problems if coronavirus takes hold 

Hong Kong stocks fell slightly at the start of trade on Tuesday morning, a fourth consecutive day of losses.

The Hang Seng Index edged down 0.37 per cent, or 98.49 points, to 26,722.39.

The benchmark Shanghai Composite Index fell 1.62 per cent, or 49.16 points, to 2,982.07 and the Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 2.09 per cent, or 40.35 points, to 1,893.01. Analysts said that some losses were tempered by bargain-buying.

Tokyo stocks dropped more than 3.5 percent at the open on Tuesday, tracking falls on global markets as fears mounted that the new coronavirus outbreak will derail economic growth.

The benchmark Nikkei 225 index sank 3.58 percent or 836.57 points to 22,550.17 in early trade, while the broader Topix index was down 3.53 percent or 59.07 points at 1,614.93.

In Australia, the share market slumped 2.3 per cent at the open.

Good morning. On Monday European shares suffered their sharpest drop since directly after the Brexit vote with the FTSE 100 plunging 3.3pc, its worst one-day fall for four and a half years. Around £76bn was wiped off the value of companies across London’s main market. 

Across the pond, Wall Street stocks joined the global rout and finished with steep losses as worries mounted that the new coronavirus will derail economic growth.

5 things to start your day

1) Boris Johnson’s plan to ‘level up’ the UK and its regions faces serious challenges, with the richer economies of London and the south east set to grow significantly faster than northern areas. Towns in the north east, Yorkshire and the Humber, and the West Midlands are expected to be the slowest-growing areas over the next three years.

2) Coronavirus spells trouble for tourism from Bangkok to Bicester: Bicester Village’s streets of wood-panelled designer stores and red letter boxes have looked more like a ghost town since the coronavirus triggered a plunge in Chinese visitors.

3) Goldman Sachs and EY quarantining staff returning from China: Goldman is one of several banks and professional services companies understood to have told staff to “self-isolate” and work from home for up to 14 days after returning from the worst-affected regions, including China and Hong Kong.

4) An aggressive New York hedge fund has demanded the break-up of Prudential after building a near-5pc stake in the insurer. Third Point is calling for the British blue-chip to split its US life insurance business Jackson from its high-growth Asian operations, arguing Prudential is heavily undervalued because the two arms are tied together.

5) Uber to pay drivers to install rooftop billboards on their cars: In its first move into the advertising industry, the app-based taxi company has signed a deal with Las Vegas firm Adomni to place the adverts in three US cities. 

Coming up today

Analysts at Goodbody say a sell-off at shopping centre-owner Hammerson looks “overdone”, adding the FTSE 250 group’s disposal strategy – which included the sale of a further seven retail parks for £400m on Friday, its biggest sale in a decade – was proceeding as planned, and some of its assets are being underestimated.

Interim results: Clinigen, Hotel Chocolat, Manchester United

Full-year: Derwent London

Preliminary: Croda, Hammerson, Meggitt, Morgan Advanced Materials, Petrofac

Economics: CBI distributive trades (UK), final GDP reading (Germany), consumer confidence (US)