There are also heavy losses on Wall Street after the opening bell.

• Dow Jones down nearly 530 points, or 1.8%, at 28,459
• S&P 500 down nearly 60 points, or 1.8%, at 3235
• Nasdaq down 220 points, or 2.36%, at 9094

The oil price has come back a bit, but is still down $1.46 at $59.23 a barrel, a fall of 2.4%.

But mining companies are not the only ones suffering during the equity sell-off.

Europe’s top luxury names –– including LVMH, Kering, L’Oréal, Burberry and Hermes –– have seen nearly $50bn wiped off their market value since the virus outbreak. Analysts at Bernstein calculate that Chinese consumers spent $149bn during the lunar new year holiday last year and that’s unlikely to be repeated this year due to the travel restrictions. The outbreak couldn’t have come at a worse time –– millions of Chinese usually travel during the holiday period, but many have been forced to ditch their plans.

Russ Mould, investment director at the stockbroker AJ Bell, says:

The market is back in panic mode about China’s coronavirus. An extended lunar New Year holiday is nothing to celebrate for China, instead it represents an escalation of attempts to contain the deadly virus by restricting travel and locking down major cities.

As the death toll rises, all eyes are on the World Health Organisation. So far it has resisted calls to declare the outbreak a health emergency. Should that change there could be restrictions on international trade and travel, putting pressure on a fragile global economy.

The difficulty for investors is that it is extremely difficult to predict what turn events might take in the coming days and weeks. Until there are signs the virus has been contained equities look set to be dogged by uncertainty. Previous experience of global health crises does at least suggest there could be a fairly rapid recovery once the number of cases has peaked.

The FTSE 100 index in London is one of the worst performers outside China because it is heavily weighted towards the resources sector, whose fortunes are closely tied to the commodity-hungry Chinese economy.

The sell-off on stock and commodity markets continues, as investors panic about the deadly coronavirus outbreak in China, which has spread to more than 10 other countries. Here is our markets story.

Rupert Thompson, chief investment officer at the Aim-listed wealth management firm Kingswood, has also compared the Wuhan outbreak with the Sars outbreak in the early 2000s.

He says the short term impact on the Chinese economy is “likely to be considerable” but he is fairly relaxed about the impact on the global economy –– and stock markets.

Global equities had started to looked vulnerable to a correction following their gain of close to 14% since early October, and the coronavirus has provided the catalyst for just such a setback.

[The Sars] outbreak hit Chinese growth and the Chinese equity market significantly but the impact was short-lived with both rebounding within a matter of months. As for global equities, there was minimal impact at all. This time round, the Chinese economy is much larger and much more connected with the global economy. The Chinese authorities have also imposed much more draconian measures to try and halt the virus.

Turning to the world economy and equity markets:

We continue to expect global growth to recover a little over the coming year on the back of the relaxation of monetary policy and easing in trade tensions. As for global equities, the risk is clearly that the news gets worse before it gets better and the market correction could well have further to run as a result.

Indeed, corrections of 5-10% are surprisingly common. In the past, however, even when global health scares have impacted markets, the effect has been short-lived. At the peak of Ebola fears in 2014, global equities fell back 9% over the course of a month but had recouped these losses within weeks.

Tommy Wu, senior Asia economist at the consultancy Oxford Economics, says the current coronavirus outbreak could “potentially be a high impact but short-lived event, similar to the Sars experience in 2003”.

He reckons it could drag GDP growth lower in China in the first quarter and possibly also the second, but beyond that the impact should begin to fade.

Following the Sars outbreak, China’s GDP growth fell to 9.1% y/y in Q2 2003 from 11.1% in the previous quarter and subsequently recovered to 10% in H2 2003. Consumption and travel were most affected. Retail sales growth fell to 4.3% y/y in May 2003 from an average of 9% in the previous six months ... However, [it was] quick to rebound.

Similarly, industrial value added growth slowed to 13.7% y/y in May 2003 from 17.5% at the beginning of 2003. But it recovered to 17% in June and stayed robust for the rest of 2003. Investment and property market activities, on the other hand, were largely unaffected, in part bolstered by monetary easing.

Similar to the Sars outbreak, he expects the impact of the Wuhan coronavirus to be mostly be felt on consumption (through retail and tourism-related sectors) and to a lesser degree on other economic drivers (such as investment and industrial value added).

We also anticipate the economic impact to be less severe compared to the Sars episode, at least for now. The faster reaction time by the Chinese authorities this time around, with increased transparency and firm actions taken recently, are certainly helpful in mitigating the impact on public health, confidence and the economy...

We also expect the government to roll out measures, if needed, to stabilise growth. Though we do not expect significant monetary easing amid the ongoing campaign to rein in financial risks.

My colleague Joanna Partridge writes:

Brexit uncertainty plus political turmoiled equalled financial distress for almost half a million British businesses in the final three months of last year, according to a new survey which measures corporate health.

About 494,000 companies were found to be in significant distress in the last quarter of 2019 by the latest red flag alert from insolvency firm Begbies Traynor, representing about 14% of all economically active firms and the highest number since the survey began in 2004. Significant distress is described as firms which have county court judgments of of less than £5000 filed against them, or businesses which have been identified by its credit risk system.

The number of businesses in significant distress has risen by 81% since the start of 2016. The uncertainty following the European referendum result is partly to blame, according to Julie Palmer, a partner at Begbies Traynor.

“Distress increased to record levels on the back of ongoing uncertainty around Brexit. These figures clearly demonstrate the impact of this indecision, and with political certainty and a clear Brexit path, UK businesses should, at last, be able to plan for 2020 with a greater sense of clarity,” she said.

Retail, real estate and property and construction sectors suffered more than others, although significant distress at businesses rose in 15 out of 22 sectors of the economy. The highest year-on-year increase in the number of businesses suffering significant financial distress was seen in the real estate and property sector, with a 13% rise in the number of businesses affected. The survey finds financial difficulties affecting both bricks-and-mortar and online retailers.

On currency markets, sterling has risen slightly versus the dollar and the euro (to $1.3087 and €1.1872), as the Brexit date of 31 January approaches.

Cailin Birch, global economist at The Economist Intelligence Unit in London, has sent us her thoughts on the decline in oil prices.

• The recent drop in Brent crude oil prices, below $60 a barrel, reflects two main factors: a recent spike in concerns over the impact of the coronavirus stemming from China, and deeper, more lingering concerns about the health of the global economy.

• Our China experts believe that the economic impact of the coronavirus will depend on how quickly it is contained and the confidence of the public in the authorities’ ability to take effective measures. The experience of previous disease outbreaks, including Sars in 2002-03, suggests that consumer spending could be negatively affected in the next 2-3 months, but that this is likely to be compensated for later in the year.

• The oil market’s initial reaction is relatively in line with this outlook. Confidence in global oil demand growth had strengthened slightly in December and early January, buoyed by the signature of the US-China phase-one trade agreement. The virus outbreak has been a setback.

She expects oil prices to remain around $60 to $65 a barrel in the coming months, provided that the virus remains contained, as the negative effects have largely been priced in. “If conditions in China were to deteriorate, however, Brent crude prices could dip by another $3-$5 per barrel.”

However, consumer credit was relatively weak, according to the UK Finance figures. It grew by 4% year-on-year in December, the joint-weakest pace since April. Within this, credit card lending rose 2.4%, the second-weakest performance since late 2014.

The Bank of England’s monetary policy committee meets on Thursday and will discuss whether to cut interest rates in response to the economic slowdown at the end of 2019 –– or to stay put amid signs of recovery since December’s election.

It will be the last meeting chaired by Mark Carney, the outgoing Bank of England governor. He and two other policymakers have spoken publicly about the possibility of a rate cut after economic growth in the 12 months to November slowed to 0.6%, the weakest pace since 2012. The meeting takes place a day before the UK leaves the European Union.

Carney’s last day at the Bank is 15 March, before he becomes the UN’s special envoy for climate action and finance.

How will Hong Kong be affected? Its economy dipped into recession last year as the pro-democracy protests took their toll.

Hong Kong has six confirmed cases of the coronavirus, and has banned residents of China’s Hubei province from entering.

The Saudi energy minister mentioned the Sars outbreak. Severe acute respiratory syndrome (Sars) first appeared in November 2002 in southern China and killed more than 750 people in 37 countries. It was contained by placing patients in quarantine. The outbreak ended in 2004 and the disease has never resurfaced.

The diseases are similar –– Sars and the new virus are from the same coronavirus family, and both attack the lungs –– but China has responded differently to the latest outbreak, which originated at a seafood market in Wuhan. Sars was traced back to virus-infected bats.

Thomas Abraham, author of Twenty-First Century Plague: The Story of Sars, wrote in the Guardian last week:

In 2002, China was in denial and concealed the existence of Sars not merely from the outside world but from its own people. Newspapers were forbidden from reporting the disease, except for occasional statements from government officials assuring the public that there was nothing to worry about ...

The fallout from China’s handling of Sars forced a move towards greater openness that has been apparent in other outbreaks of disease. In the case of the Wuhan flu, the World Health Organization as well as the public were informed on 31 December about the new disease.

By early January, the virus had been identified as a coronavirus by Chinese scientists, and its genetic sequence had been shared globally. Both of these moves were essential for an effective global response to the disease.

The FTSE 100 index in London has fallen more than 110 points in early trading, losing 1.49% to 7473.29.

Over on the continent, stocks have also tumbled. France’s CAC has slid 1.7% while Germany’s Dax and Spain’s Ibex are both down 1.5%.

You can follow the latest news about the spread of the deadly virus on our main news blog.