Equities retreat due to concerns over new coronavirus impact

LONDON — Stock markets retreated on Thursday on growing concerns over the economic impact of the new coronavirus that has killed 170 people in China after a spike in the number of deaths.

Tech stocks and airlines were among key losers as the World Health Organisation called an urgent meeting on whether to declare a global health emergency over the virus.

Around 11:00 GMT, London's benchmark FTSE 100 index was down 0.7 per cent. Investors were looking ahead also to a policy update due 12:00 GMT from a Bank of England meeting that could see an interest rate cut on the eve of Brexit to help boost Britain's stalled economy.

In the eurozone, Frankfurt's DAX 30 index shed 1 per cent and the Paris CAC 40 slumped 1.2 per cent.

"With the coronavirus death toll leaping... the European markets reverted back to panic mode, quickly unravelling the rebound managed in the last couple of sessions," said Connor Campbell, analyst at Spreadex trading group.

The pound dropped also, with investors "clearly anxious about this afternoon's knife edge Bank of England meeting", he added.

Traders' main focus remained the virus and increased concerns over its spread weighed heavily also on oil prices on Thursday, with benchmark Brent crude sliding more than 2 per cent.

The WHO, which initially downplayed the severity of the disease, has warned all governments to be "on alert" as China reported 1,700 new cases of the SARS-like virus that has infected 7,700 people and been detected in at least 15 countries.

Airlines around the world are either suspending or paring back services in and out of China following cases of human-to-human transmission outside the country, and manufacturers have also been cutting their Chinese operations.

US Federal Reserve Chairman Jerome Powell said the coronavirus posed a new risk to growth in China and elsewhere.

In Asian stock markets on Thursday, Taipei closed down 5.8 per cent on the first day of trade since the Chinese New Year break, with Eva Airways plunging 9.9 per cent and market heavyweight and key Apple supplier Taiwan Semiconductor Manufacturing (TSMC) sliding 5 per cent.

Fellow Apple supplier Hon Hai Precision Industry fell by the daily limit 10 per cent after it said most of its manufacturing plants in China would remain closed until February 10.

Elsewhere Thursday, Tokyo's main stocks index closed down 1.7 per cent and Hong Kong ended 2.6 per cent lower.

Japanese automaker Toyota said it would keep its plants in China closed until at least February 9 over concerns about the outbreak.