That means £62bn was wiped off the FTSE 100 during today’s session, representing a heavy loss for the first trading day of the week.

We’ll be back tomorrow from 8am. -KM

It’s a sea of red across global markets.

But European stocks are the biggest losers, with Italy’s FTSE MIB still the worst performer.

The Italian index is down more than 5.3% following news that the local death toll due to coronavirus rose to seven this afternoon.

More than £63bn has been wiped off the FTSE 100 so far today, though we still have about 20 minutes of trading to go.

Oil prices have taken another tumble, with Brent crude now down 4.8% or $2.86 per barrel at $55.64.

The FTSE 100 continues to lose ground and is now at its lowest level since early October 2019.

Richard Hunter, head of markets at Interactive Investor, explains that London’s blue chip index is suffering due in part to the slump in oil and mining stocks, which rely on Chinese demand for a good chunk of their growth.

He says:

For the UK, the FTSE100 has been a particular target for investors and stands down over 5% in the year to date, given its particular exposure to oil and mining as well as the obviously affected areas of tourism and travel.

By the same token, and perhaps of some consolation to longer-term investors looking for an entry point, is the reminder that mark downs such as this can be indiscriminate as sentiment deteriorates, and that there will be certain sectors which will be less affected by the outbreak.

Even so, the fact that the gold price is hitting multi-year highs is reflective of the current penchant of investors towards havens. Until there is some clarity on whether the virus has been sufficiently contained, the market will likely remain on tenterhooks.

This is the biggest slump in European shares since the middle of 2016, according to Reuters.

But in what looks like an attempt to avoid panic, the World Health Organisation has issued fresh statements clarifying that they’re still not categorising the coronavirus outbreak as a “pandemic” just yet.

According to Reuters news wire, the head of the WHO, Tedros Adhanom Ghebreyesus, has said that at the moment we are not witnessing the uncontained global spread of the virus and we are not witnessing large-scale deaths. He adds:

Using the word pandemic does not fit the facts

We must focus on containment while preparing for a potential pandemic

The turmoil in financial markets comes as there are reports of more deaths in Italy, which is at the centre of the coronavirus crisis in Europe. A seventh person has died in the country, according to the Ansa news agency.

The falls on Wall Street have dragged the MSCI world stock index into negative territory for the year so far. It’s down 2.7% on the day.

A quick look at the markets before Wall Street opens. Stocks and oil have tumbled further.

• FTSE 100 in London down 280 points, or 3.78%, at 7123
• Germany’s Dax in Frankfurt down 556 points, or 4.1%, at 13022
• France’s CAC 40 in Paris down 248 points, or 4.1%, at 5781
• Italy’s FTSE MIB down 1,454 points, or 5.81%, at 23,328

Crude oil has also plunged, by 4.85%, or $2.61 a barrel, to $50.77 a barrel.

As the virus spreads in Europe, investors are dumping stocks and rushing into safe-haven assets such as gold (at a seven-year high today). Futures are pointing to sharp declines on Wall Street when it opens for trading in less than half an hour. The Dow Jones is expected to open 800 points lower.

Last week, Wall Street’s main indices rose to record highs as optimism spread among investors that the global economy would bounce back from the coronavirus hit.

There has been a sixth death from the coronavirus in northern Italy, according to the state broadcaster RAI.

Economists at ING have looked at the impact of the virus outbreak on economies in Asia, in a note entitled: “Holidays in hell: slumping tourism will cost Asia $105bn-$115bn in 2020”.

Robert Carnell, chief economist and head of research, Asia-Pacific, at ING says:

The impact of the coronavirus on economies in Asia is potentially huge, as tourism in the region takes a beating... If we assume that tourism to and from China basically grinds to a halt in 2020, and extra- regional tourism also diminishes, then the cost to the region from lost tourism revenues alone is approximately US$105bn-$115bn.

The World Health Organization has praised China for the measures it’s taken to stop the coronavirus spreading. Bruce Aylward, the head of a visiting WHO delegation, said the “incredibly difficult measures” probably prevented hundreds of thousands of cases in the country.

He also said several data sources suggested there is a general downward trend in the number of of infections being reported by China’s National Health Commission, despite some statistical problems.

The commission reported 409 new coronavirus cases today, down from 648 the day before. Chinese authorities have begun to unwind some of the transport and travel restrictions that were put in place last month.

The virus has killed nearly 2,600 people in mainland China and infected nearly 80,000.

However, a spike in cases in Italy and south Korea has caused alarm – and world stock markets have tumbled as a result. A fifth person infected with the coronavirus has died in Italy.

The German business association BDI says several manufacturing sectors are expecting a shortage of supplies from the Far East in coming weeks due to the coronavirus. Affected sectors include engineering, cars, pharmaceuticals and paper.

BDI says:

The more than 5,000 German companies in China are currently severely restricted in procurement, production and sales.

HSBC’s search for a permanent chief executive may have suffered a setback today, after one of the reported candidates pulled out.

Jean Pierre Mustier, boss of Italy’s Unicredit, will stay there, Unicredit said. Unicredit said it “normally never comments on rumours and speculations” – a rule it will apparently break if the story is strong enough:

[T]he Group would like to state that Jean Pierre Mustier confirms he will remain with the bank.

UniCredit would also like to remind everyone that it has just launched a new strategic plan, Team 23, and that the whole management team, including Jean Pierre Mustier, is fully focused on its successful execution.

HSBC is currently being led by Noel Quinn on an interim basis. He could still get the nod permanently, to carry out his plan to cut 35,000 jobs across the world, including significant cuts in the UK.

An interesting point from influential economist Mohamed El-Erian, who serves as chief economic adviser at Allianz, the insurer.

Stock markets have been on a tear in recent months even as economic fundamentals have appeared weaker. The coronavirus outbreak could test that divergence – particularly given central banks’ limited arsenal.

Interest rates are still at historically low levels, suggesting that any further support can only be limited relative to the response after the financial crisis a decade ago.

A quick Brexit update via the politics live blog: don’t bet on everything being finished by the new year.

Amélie de Montchalin, the French Europe minister, on Monday said that France will not sign up to a bad trade deal with the UK just to meet Boris Johnson’s December 2020 deadline. Johnson has set this deadline by ruling out an extension to the post-Brexit transition.

The Guardian’s Brussels correspondent, Jennifer Rankin, translates: “Just because Boris Johnson wants an agreement at any cost doesn’t mean we will sign a bad deal for the French, under pressure of blackmail or the timetable.”

You can follow today’s Brexit developments with Andrew Sparrow on the politics live blog:

Investors are pricing in an increased chance of the European Central Bank cutting interest rates in the coming months. A rate cut would aim to support growth at a time when the coronavirus outbreak adds to risks to the eurozone economy.

Reuters reported:

Eonia money market futures dated to the ECB’s July 2020 meeting show about 5 basis points [0.05 percentage points] of rate cuts are now priced in, up from 3.5 bps a week ago. That equates to roughly a 50% chance of a 10-bps cut versus 35% last week.

It marks a turnaround from the start of 2020, when a stabilisation in data had led to a view that the ECB might be encouraged to start raising rates from next year.

The ECB’s next interest rate decision is due on 12 March.

Bird of prey update: reader Michael Nelson suggests Christine Lagarde was holding a peregrine falcon, the world’s fastest animal when it dives for prey. The picture was “maybe a subtle reference to aggressive bird brains needing to be held in check”, he said.

The Encyclopedia Britannica suggests that hawks are members of a different genus to falcons – although the terms are often used interchangeably. And just to complicate matters, the peregrine falcon is sometimes known as the duck hawk.

The implications on monetary policy remain unclear.

What does the most successful investor in modern history think about the coronavirus outbreak, amid market turmoil? Ignore the headlines.

Warren Buffett, known as the sage of Omaha, has made billions of dollars from buying shares in companies and holding them for years – a strategy that seems remarkably unpopular in light of markets’ response to news.

In an interview with CNBC, Buffett said:

If you’re buying a business you’re going to own it for 10 years, or 20 years, or 30 years. The real question is has the 10-year or 20-year outlook for American businesses changed in the last 24 hours or 48 hours?

You don’t buy or sell your business based on today’s headlines. If it gives you a chance to buy something that you like and you can buy it even cheaper it’s your good luck, basically.

Coronavirus fears are pushing European shares on the Stoxx 600 towards their worst day since 2016 – the aftermath of the Brexit referendum.

The falls suggest that investors are starting to price in a direct hit to European economic growth that could hurt company profits. Central banks are already watching carefully.

Fitting with that theme, here’s a picture that central bank watchers will see again and again: European Central Bank president Christine Lagarde holding a bird of prey at the meeting of central bankers and finance ministers in Riyadh, Saudi Arabia.

Asked about her monetary policy stance in December, Lagarde said she would aim to be a “wise owl”, rather than fitting in the classic dichotomy of hawk (tighter monetary policy to stop inflation)/dove (looser monetary policy to support growth).

Nevertheless, the coronavirus outbreak could tip the ECB back towards the dovish end of the scale.

(We are hesitating to say it’s a hawk definitively – please do tag me on Twitter/comment below if you can identify it.)

Another aspect of the flight to safe havens is visible on currency markets, with the demand ascent of the US dollar.

Sterling has lost 0.5% against the dollar on Monday. One pound bought $1.2909 at the time of writing.

The euro lost 0.26%, trading at 1.082 against the greenback at the time of writing.

The relative strength of the US economy, and its distance from the coronavirus outbreak’s epicentre in China, had helped it become a haven for investors (although it fell back slightly on Friday).

Smoking kills half of all people who take it up, but Philip Morris International (PMI) wants to be seen as part of the solution even though the company continues to make and market cigarettes around the world.

PMI, one of the world’s biggest tobacco companies, drew up plans for a £1bn tobacco transition fund in the UK to be spent by local authorities and Public Health England on persuading smokers to give up cigarettes in favour of alternatives such as its “heat not burn” smokeless tobacco product, IQOS, leaked documents reveal, writes the Guardian’s health editor, Sarah Boseley.

The documents, obtained by the Guardian and Channel 4’s Dispatches programme, show PMI had discussions with a leading anti-tobacco MP about presenting a smoke-free bill proposing the fund to the House of Commons. If passed, the bill would have ended an advertising and marketing ban on IQOS and e-cigarettes.

You can read the full story here:

A large dose of scepticism on that fairly positive reading from Germany on the business climate: economists are essentially saying that the worst is yet to come.

Better expectations from industry are usually bullish sign, said Samuel Tombs, chief UK economist at Pantheon Macroeconomics, but it’s difficult to interpret these data at the moment.

As we type, global—and in particular EZ—equities finally have woken up to the fact that what has been very draconian measure in China to curb the spread of the virus—at least from the point of view of the economy—are now spreading to the rest of the world.

News over the weekend that several towns in Northern Italy have been effectively shut down – and air and rail traffic suspended between Italy and Austria – seems to have been the straw that broke the camel’s back. In short, financial markets are now starting to price in an increasingly nasty economic shock at the start of 2020.

Daniela Ordonez, lead eurozone economist at Oxford Economics, agreed. The data are positive, but given recent events they illustrate that the economic effects will take longer to really hit home.

With the virus now at the gates of Europe, with the the spate of new cases reported in Italy, survey data are very likely to deteriorate rapidly in coming months.

A worsening of hard eurozone data is likely to follow since the fragility of global supply chains means even small disruptions in China’s output could still have large repercussions for Europe down the line.

For now, we continue to believe that the epidemic will be contained to the first half of 2020, so the German and eurozone industrial recovery will not be derailed but only delayed until the second half of the year. Of course, this outlook could deteriorate rapidly should the virus, now spreading to developed countries, fails to be contained.

It’s now a 3.3% fall for the FTSE 100. It is down by 244 points, to 7,158 points.

As you can see from the following chart of daily performances over the past year, it’s quite a striking fall.

But it also helps to put the fall in context: shares on London’s blue-chip index have only been knocked back to their levels ahead of the general election in December.

We mentioned earlier that investors were seeking safe-haven assets. It appears to be a full-on pivot away from riskier assets this morning, with money flowing to bonds.

The yield on the UK’s 10-year gilt has fallen by 7 basis points (0.07 percentage points) to hit three-week lows of 0.508%. Bond yields, which move inversely to prices, have fallen as more investors look for less risky assets like government debt.

The US 10-year Treasury yield has dropped by 8 basis points, and the yield on the longest US government bond, the 30-year, has fallen to a record low.

An interesting reading from the Ifo Institute in Germany: its widely followed business climate indicator has actually beaten expectations – a reminder, perhaps, that the much of the coronavirus’s financial effects so far are down to fear, uncertainty and doubt.

The Ifo’s business climate reading came in at 96.1 points, compared with a Reuters consensus forecast for a fall to 95.3. The institute is sticking to its first-quarter growth forecast of 0.2%. Ifo president Clemens Fuest said in a statement:

The German economy seems unaffected by developments surrounding the coronavirus.

That FTSE 100 selloff has deepened: it’s now down by 2.8%, more than 200 points.

Germany’s Dax is down by 3.4%, France’s Cac 40 has lost 3.5%, and the FTSE MIB in Italy has dropped by 4%.

Here’s a handy heat map from Hargreaves Lansdown showing which stocks have fallen: it’s almost all of them. Some 96 of the FTSE 100 were down at the time of writing.

Those tourism stocks are the worst performers, but some of the miners are also in the crosshairs (likely amid expectations of slumping demand) and it’s also worth noting the 5.4% fall from Barclays, which is reportedly searching for a new chief executive. Here’s what the FT said in its report (£) from this morning:

Mr Staley, 63, who has led the bank since December 2015, has told colleagues he expects to leave the group by the end of next year, according to two people briefed on the bank’s plans. He could stand down at the annual meeting in May 2021, they added.

A rough timetable for Mr Staley’s departure was in place before Britain’s top financial regulators recently launched an investigation into his ties to Jeffrey Epstein, the paedophile financier. But one of the people said the probe had “focused minds” on the bank’s board of directors and injected a sense of urgency into the process.

Of those few that eked out a gain, packaging company Bunzl beat expectations on annual profits and announced new acquisitions.

A quick diversion from coronavirus: a shakeup in the UK’s struggling estate agency sector.

Two of Britain’s biggest estate agency groups are in talks over a possible £470m merger that will bring together well-known brands such as Hamptons International and Your Move and could also mean job losses, writes the Guardian’s Julia Kollewe.

In a brief statement to the stock market, Countrywide said that “it is in discussions with LSL Property Services regarding a possible all-share combination”.

Countrywide is the UK’s largest listed property services group and owns about 60 high street brands including Hamptons International, Bairstow Eves and Gascoigne-Pees. It has more than 850 branches across the country and employs more than 10,000 people.

You can read more here:

If you need an indication of why Italy is bearing the brunt of stock market losses this morning, here’s why Bank of Italy governor Ignazio Visco has warned that the outbreak could wipe a quarter of a percentage point from Italy’s economic growth this year.

Early calculations suggest the outbreak could knock by 0.1 percentage point off global growth this year, Visco said yesterday, according to a report (£) by Bloomberg at the G20 finance ministers’ meeting in Riyadh. Here’s more from the report:

“I’m already worried now but if we don’t see a material improvement by September, I’d be really worried,” Visco said. “You need two quarters to realize and understand.”

Visco lent weight to his argument by warning there’s a risk of a “mini de-globalization” if pessimism and fears about further supply-chain interruptions leave the economy suffering for a protracted period. “This shouldn’t be ignored.”