Coronavirus wreaks havoc on Asian trade
BiG businesses were in panic mode yesterday as the coronavirus outbreak threatened to engulf their Asian operations.
Airlines, car makers, technology and consumer businesses moved to shut down their China operations to cope with the worsening outbreak.
The virus, which originated in the central city of Wuhan, has affected over 6,000 people, more than the 2003 SARS epidemic, and claimed the lives of 132.
Yesterday, the stock market in Hong Kong suffered its worst session in six months, tumbling 2.8pc on its first day of trading since the outbreak.
investors fear that the fallout could cause permanent damage to the global economy, as business is disrupted and companies protect staff and customers.
British Airways suspended flights to China ‘with immediate effect’ until at least March and United Airlines grounded 24 planes. Starbucks closed half of its 4,300 Chinese branches, and has ditched a planned upgrade to its profit forecasts.
Uniqlo, H&M and ikea followed suit, closing dozens of stores, while McDonald’s has closed all its restaurants – several hundred – in the Hubei province.
Car producers Toyota and Hyundai kept plants shut and pulled foreign staff out of the country, while global banks suspended business travel and told staff to work from home.
The price of gold rose 0.3pc to $1,571.07 as investors moved to protect money against fears the disease will lead to a slowdown in the Chinese and global economy.
On Western markets, airline stocks have taken a battering since the outbreak was announced in mid- January, with BA-owner iAG down 12pc, Luftthansa down 7pc and Air FranceKLM down 13pc.
Even firms that do not operate in China, such as Easyjet and Ryanair, have seen shares dip.
Luxury brands are also expected to suffer if Chinese tourists stay put. Shares in Burberry have fallen 13pc since the middle of the month, Mulberry has dropped 7.9pc and Louis Vuitton- owner LVMH is down 7pc.
Hotel groups have suffered, with Holiday inn group intercontinental Hotels losing 8pc.
Disney stock has fallen 5pc after it closed its theme parks in Shanghai and Hong Kong.
Cruise companies, such as P&O Cruises owner Carnival, banned passengers that had recently left Wuhan from their ships and cancelled sailings.
Evacuations are well under way to remove Western staff and tourists. French manufacturer PSA, which makes Vauxhall, Peugeot and Citroen cars, is repatriating international staff.
Nissan said it was evacuating its Japanese staff in Wuhan.
Facebook, Credit Suisse and Morgan Stanley told their Hong Kong staff to work from home for two weeks, while UBS and Goldman Sachs have imposed travel restrictions.
Apple is monitoring the situation, and has shortened opening hours in its Chinese stores.
Hong Kong, the home of numerous banking staff and luxury brands, raised its response level to ‘emergency’ on Saturday.
Markets in Tokyo, London and New York have shown signs of stabilising after a fortnight-long decline. But the price of copper, regarded as a bellwether of the global economy’s health, fell for the tenth consecutive day. The oil price is also under pressure.
Official Chinese data two weeks ago showed the slowest economic growth in 29 years. A Chinese government economist said the outbreak could cut China’s firstquarter growth from around 6pc to 5pc or lower.