Continued spread of coronavirus hits financial markets amid concerns over broader economic impact

Worries over the continued spread of the coronavirus have shaken the financial markets with stocks from Wall Street, London and Tokyo all seeing a decline. Airlines and other businesses with major sales or operations in China saw their shares dip as the scale of the issue became clear.

In early trade on Monday, London’s FTSE index fell more than 2% while the US Dow Jones fell 1.4%. The price of oil also fell against a backdrop of a potential fall in demand should China’s economy be impacted by the virus.

The coronavirus has so far killed 81 people in China, with almost 3,000 confirmed illnesses, with another 44 cases confirmed abroad.

Businesses including luxury goods manufacturers and travel firms have been among the biggest losers so far, as demand from their key Chinese market is likely to be affected. Many companies in China meanwhile have extended workers’ holidays and are instructing employees in some of the most affected regions to stay away from work.

By way of comparable scenarios, China’s annual growth slumped from 11% to 9% in the aftermath of the outbreak of Sars in 2003.

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