Dow posts biggest one-day jump since 2009 as markets bounce back – as it happened

Graeme Wearden

from on 2020-03-02 21:52 (#503VT)

Rolling coverage of the latest economic and financial news, as the Dow Jones posts its strongest one-day points surge ever

9.52pm GMT

Finally, here's my colleague Rob Davies on today's market drama:

The world's economic powerhouses launched a coordinated push to show they can cope with the fallout from coronavirus, after the Organisation for Economic Cooperation and Development (OECD) warned global growth could be cut in half.

Governments, central banks and international economic institutions agreed on Monday to do whatever it takes to prevent economic meltdown, prompting signs of recovery on stock markets still reeling from their worst week since the financial crisis of 2008.

9.50pm GMT

US warehouse-club retailer Costco was one of the big winners on Wall Street today.

Costco shares surged by 10% today, following reports of long queues and empty shelves as customers stocked up on groceries.

9.33pm GMT

A late development: ECB chief Christine Lagarde has released a statement, saying the ECB 'stands ready' to help.

Echoing similar sentiment from the Bank of England today, it says:

The coronavirus outbreak is a fast developing situation, which creates risks for the economic outlook and the functioning of financial markets. The ECB is closely monitoring developments and their implications for the economy, medium-term inflation and the transmission of our monetary policy. We stand ready to take appropriate and targeted measures, as necessary and commensurate with the underlying risks.

Statement by ECB President on coronavirus https://t.co/ChQb5Tf0OL pic.twitter.com/zqToY3xprB

9.30pm GMT

NEW:
Expect a G7 statement tomorrow after noon teleconference of finance ministers acknowledging potential impact on growth of Coronavirus & agreeing to work together... cant confirm Central Bank participation.

Early news of this call has led to Dow Jones shooting up 1000 points

9.17pm GMT

This is the Dow's strongest daily surge since March 2009, according to the WSJ's Akane Otani.

Signs of a topsy-turvy market: the Dow just had its best day since March 2009, a day after closing out its worst week since 2008. $DJIA

9.09pm GMT

BOOM! US stocks have surged sharply higher tonight, as speculations swirls of coordinated intervention to prop up economic growth.

The Dow Jones industrial average has leapt by 1,293 points, its biggest-ever points gain.

Stocks rose sharply at the close after a volatile day of trading. The Dow gained more than 1,100 points, or 5%, and the S&P 500 and Nasdaq both rose more than 4%. https://t.co/9N2VoIP60P pic.twitter.com/9AnT5qMjEi

8.57pm GMT

Is it time to buy the dip. Or, to be blunt, have you missed out by sitting on the sidelines today?

Economist and investor Mohamed El-Erian reckons long-term investors should resist looking for bargains just yet.

I think the policies and fundamentals are going to go in favor of bad fundamentals, unfortunately, initially," he said.

For those interested in how the US #stocks are #trading
Interesting dynamic in play:
Short-term #traders bought, looking for a bounce AND the ability to handoff to "stronger hands" encouraged by all the policy talk.
The longer the handoff takes, the higher the risk to the bounce.

8.53pm GMT

The S&P 500 is also romping higher in late trading.

U.S. markets are surging. The S&P is up 3.5% and the Dow rose over 1,000 points https://t.co/tKjOUKlEPc pic.twitter.com/DUgtdNXuN1

8.51pm GMT

Shares are pushing higher in New York in late trading, sending the Dow up by over 4%.

That's a sizzling 1,046 point gain -- which would make up for one of last week's quadruple-digit losses.

7.52pm GMT

Economist Tony Yates has written about the economic risks of coronavirus, and the limited powers central banks have to fight it.

Here's a flavour:

A widespread halt in economic activity could cause insolvencies and defaults on bank loans, putting the viability of banks in question, and spreading financial disruption even further. The financial crisis of 2008 started out as a moderate-sized and localised default on US sub-prime mortgages. Other countries became infected because banks elsewhere were exposed to those loans, to a highly uncertain degree initially, and other institutions were exposed to those banks, and so on.

7.13pm GMT

With less than two hours trading left today, Wall Street is still rallying - up over 2.5%.

STOCKS NOW:
- Dow up 764.98 points
- Nasdaq up 208.46
- S&P up 74.40 pic.twitter.com/yOa92u3Sm3

7.01pm GMT

The White House appears to be putting more pressure on the Federal Reserve to cut interest rates ASAP.

This is from Bloomberg's Saleha Mohsin:

Larry Kudlow and Steven Mnuchin both favor the Fed cutting interest rates before its next scheduled meeting on March 17 and 18, sources tell @JenniferJJacobs and me

6.04pm GMT

Reuters are reporting that G7 finance ministers will hold their coronavirus teleconference call at noon UK time on Tuesday.

5.44pm GMT

Time for a recap

The Dow jumps more than 750 points on a volatile trading day, as Wall Street tries to recover from last week's massive sell-off. pic.twitter.com/1L1malRHy9

5.40pm GMT

Jack Welsh is looking down on the New York stock exchange, after the former GE titan's death was announced today.

5.38pm GMT

Analysts at Berenberg bank has predicted that the Federal Reserve will cut interest rates at its meeting later this month - perhaps by more than expected.

But they also caution that lower interest rates will have a limited impact (despite Donald Trump's urging today).

The Fed is now expected to cut the target for the Federal funds rate by 25bp to 1.25-1.50% at its March 17-18 FOMC meeting, but we would not be surprised if the Fed decided to do a larger 50bp cut.

While a rate cut could pacify financial markets, we expect its impact on the real economy will be muted. Monetary easing cannot fix supply-side shocks, especially with monetary policy already easy and bond yields at historic lows.

5.35pm GMT

Wall Street's most famous face is worried about the financial crisis, reports our US business editor Dominic Rushe:

Peter Tuchman, the trader whose Einstein-esque features are the most photographed on the floor of the New York Stock Exchange (NYSE), hasn't witnessed a sell-off as bad as this since the 2008 financial crisis. And he thinks it is going to get worse.

"There's a lot of fear here. A lot of confusion," Tuchman said at the end of a week when investor panic over the likely impact of the coronavirus had triggered the worst sell-off in US stock markets for a dozen years....

"I don't think our administration here has positioned or prepared itself correctly," he said. "Investors are not stupid. They don't like to be played and they don't wait for the president of the United States to go: 'Nothing to see here. Keep walking.'"

5.05pm GMT

A former top executive at Tesco has given a fascinating insight into how supermarkets will be preparing for panic buying and mass stockpiling.

My colleagues Zoe Wood and Jasper Jolly explain:

British supermarkets are preparing for stockpiling and panic buying by consumers if the coronavirus outbreak worsens in the UK - but analysts and retailers said the sector was prepared to handle major disruption.

A major outbreak could result in "panic buying, empty shelves and food riots", according to a research note by Bruno Monteyne, an analyst at the investment firm Alliance Bernstein. Monteyne was previously a supply chain director at Tesco. However, he added that retailers have "ready-made plans" to deal with disruption and move to "feed-the-nation" status.

5.00pm GMT

Newsflash: British Airways has announced it is cutting flights to the US, in response to lower demand for trans-Atlantic flights.

* BRITISH AIRWAYS SAYS CANCELLING SOME FLIGHTS FROM UK TO THE UNITED STATES TO MATCH REDUCED DEMAND DUE TO CONTINUING CORONAVIRUS ISSUE - STATEMENT

* BRITISH AIR SAYS ALSO CANCELLING SOME SHORT-HAUL FLIGHTS FROM LONDON TO ITALY, FRANCE, GERMANY AND OTHER EUROPEAN DESTINATIONS

4.56pm GMT

Wall Street is pushing higher, on hopes of co-ordinated action between the world's policymakers soon.

Both the Dow Jones industrial average and the S&P 500 are up over 2%:

Dow near highs for the day, up 630 points, on hopes for global policy response--but don't we already have it?
Fed's Powell: will "act as appropriate"
BOJ's Kuroda: will take "necessary steps"
ECB: "stands ready"
Italy: 3.6 b. euro stimulus package@CNBC @SquawkStreet

4.54pm GMT

European stock markets also shook off some of their losses in late trading.

The Stoxx 600 index has closed 0.1% higher. It was lifted by gains in London and Paris, but dragged back by losses in Frankfurt and Milan (where the Italian FTSE MIB lost 1.5%).

4.45pm GMT

Newsflash: The UK stock market has closed over 1% higher, making a small dent in last week's whopping losses.

The FTSE 100 finished the day up 74 points, or 1.1%, at 6654.

The good news is the FTSE100, and for that matter most other global share indices, rose today. The bad news... well, see if you can spot it pic.twitter.com/0f804bZqrC

4.40pm GMT

In another potentially significant move, G7 finance ministers are expected to hold a teleconference on Tuesday to discuss the crisis.

They could consider what measures to take to prevent Covid-19 turning into a global pandemic - the big fear which triggered last week's slump.

*G7 FINANCE MINISTERS PLAN CALL TUESDAY TO WEIGH VIRUS RESPONSE

"There will be a concerted action.

Yesterday I spoke with the G7 president, the U.S. Treasury Secretary Steven Mnuchin, and this week we will have a meeting by phone of the finance G7 ministers to coordinate our responses."

4.35pm GMT

NEWSFLASH: the heads of the International Monetary Fund and the World Bank have pledged to use all their tools to protect the global economy from the coronavirus.

In a joint statement, Kristalina Georgieva and David Malpass said they will help companies hit by the economic damage caused by the virus

"The IMF and the World Bank Group stand ready to help our member countries address the human tragedy and economic challenge posed by the COVID-19 virus. We are engaged actively with international institutions and country authorities, with special attention to poor countries where health systems are the weakest and people are most vulnerable.

We will use our available instruments to the fullest extent possible, including emergency financing, policy advice, and technical assistance. In particular, we have rapid financing facilities that, collectively, can help countries respond to a wide range of needs. The strengthening of country health surveillance and response systems is crucial to contain the spread of this and any future outbreaks.

4.28pm GMT

Budget airline Ryanair has reported it will cut its flights to Italy by 25%, responding to falling demand.

Ryanair also reported that it has seen an increase in passengers not turning up for flights, particularly from and within Italy.

"Our focus at this time is on minimising any risk to our people and our passengers. While we are heavily booked over the next two weeks, there has been a notable drop in forward bookings towards the end of Mar, into early Apr. It makes sense to selectively prune our schedule to and from those airports where travel has been most affected by the Covid-19 outbreak.

This is a time for calm. We will make sensible cuts to our schedules over the comings weeks to reflect weaker bookings, and changing travel patterns. All affected customers will be advised of any schedule changes at least 14 days in advance. While 80% of people who contract Covid-19 suffer only mild symptoms, the risk of infection can be significantly reduced by frequent hand washing with soap and water.

4.24pm GMT

Stock markets are pushing higher again!

The UK's FTSE 100 is now 80 points higher, or 1.2%, in late trading. Wall Street is catching a bid again, with the main indices up 2%.

Dow rallies sharply to levels not seen since this morning.#DOW 25884 +1.67%#SPX 3004 +1.26%#NASDAQ 8617 +1.68%#RUSSELL 1490 +0.63%#FANG 3424 +2.41% pic.twitter.com/KNTX3cMcvb

The epidemics in South Korea, Italy, Iran and Japan are the World Health Organization's greatest concern, the body's chief Tedros Adhanom Ghebreyesus said on Monday.

In the past 24 hours there were almost nine times more coronavirus cases reported outside China than inside, but the disease can be contained with the right measures, he said.

3.59pm GMT

US president Donald Trump has urged America's central bankers to slash interest rates (something which investors are already anticipating).

As usual, Jay Powell and the Federal Reserve are slow to act. Germany and others are pumping money into their economies. Other Central Banks are much more aggressive. The U.S. should have, for all of the right reasons, the lowest Rate. We don't, putting us at a.....

....competitive disadvantage. We should be leading, not following!

3.36pm GMT

The coronavirus has already infected tens of thousands of people, and killed around 3,000. It has wiped an estimated $5 trillion off global markets, sending the main stock markets down over 10%.

And it could, some experts believe, deal a real blow to modern globalisation.

Now comes the coronavirus, itself an agent of deglobalisation, forcing companies to localise their supply chains (because those in China and other countries are themselves shut down), forcing tourists to stay home and preventing workers from doing business travel, forcing people to reconsider whether "just in time" manufacturing, whereby you rely on parts to be delivered minutes before you assemble them into a product, is really the best way to run their businesses.

This is more than a trivial concern.

The desperate dilemma posed by Covid-19. Why the virus could spell an end to the modern era of globalisation. https://t.co/N1LI2uTP4S

3.21pm GMT

Back in Europe, Paolo Gentiloni, the European Commissioner for the economy, has said the EU was talking to the G20 and G7 country officials to coordinate a response to the coronavirus epidemic.

This will cheer the Paris club for the world's 36 richest nations, the OECD, which this morning called for greater cooperation to deal with the outbreak of Covid-19.

"The EU is ready to use all the available policy options if and when needed to safeguard growth against these downside risks."

"The fact that it is still too soon to measure the impact of the downside doesn't mean we can minimise it. The idea of a V-shaped recovery, returning quickly to growth can't be taken for granted and could prove optimistic."

If this is an indicator of the EU's Coronavirus planning, we're in trouble. Commission in their wisdom has organised a five commissioner press conference for #covid19 in a room with no seats pic.twitter.com/B0ds9vKPJ0

Gentiloni says eurozone finance ministers at next week's Eurogroup will discuss the options for a coordinated fiscal response to #coronavirus. "It needs to be very timely. You can't take it too early, you can't take it too late"

3.15pm GMT

US factories are suffering from the coronavirus panic, according to two surveys just released.

The Institute of Supply Management has reported that growth across the industry fizzled out last month.

US ISM manufacturing weaker than expected, with weaker new orders & employment. And it was weak even before feeling most of the effects from the coming Chinese #viruscrisis. SAD!https://t.co/JiNsHfR0Du pic.twitter.com/AXeQO3HWTv

Feb ISM Manufacturing at 50.1 but the forward looking new orders falls to 49.8. Take this with a grain of salt as the supply shock that is in train was not adequately captured by the survey. That will happen in coming months. pic.twitter.com/uxvnfOilie

Supply chain delays stemming from supplier factory shutdowns in China and the outbreak of coronavirus led to a further deterioration in vendor performance, which reportedly held back output and the processing of backlogs due to a shortage of components.

As a result, firms registered a renewed rise in outstanding business and a drop in pre-production inventories.

3.01pm GMT

Supermarket giant Walmart is the top Dow riser, up 2.5%. Consumer goods provider Procter & Gamble are up too, around 1.3%.

Both companies could benefit from a surge in stockpiling, or full-blown panic buying, if coronavirus cases continue to spread.

2.52pm GMT

Wall Street's early rally is dragging European markets back from their earlier lows:

2.34pm GMT

Newsflash: The US stock market has opened higher, as the Wall Street opening bell rings out across the trading floor.

After its biggest weekly loss since 2008, the Dow Jones industrial average has jumped 235 points to 25,644. That's a gain of 0.9%.

2.28pm GMT

Brace yourselves. Wall Street is about to open, and test investor confidence over the coronavirus crisis....

2.28pm GMT

Financial news service RANSquawk has spotted that some brokers have been upgrading their stock recommendations today.

Lot of upgrades this AM >>> pic.twitter.com/fkYowQzVB6

2.23pm GMT

The head of the World Trade Organization has warned the global economy will suffer a "substantial" impact from the coronavirus, Reuters reports.

Roberto Azevedo also told heads of delegations that a WTO meeting planned for June was still going ahead, but "necessary action" will be taken if necessary.

2.07pm GMT

The markets are turning more volatile, as all eyes turn to the Wall Street open in under 30 minutes.

As I type, the futures market is now predicting that shares will open higher in New York, with the Dow Jones currently called up 150 points.

2.03pm GMT

The FTSE 100 is being propped up by the pound, which is having a bad day.

Sterling has fallen to its weakest level against the euro since last October, down 1.5 eurocents at a1.147. It's also lost almost half a cent against the US dollar, to $1.276.

1.43pm GMT

CNBC are reporting that Jack Welch, one of the most important US business leaders of recent decades, has died aged 84.

Welch ran General Electric between 1981 and 2001, transforming the company's prospects and growing its value 40-fold. He was famous for aggressively streamlining the company, and notorious for firing the 10% worst-performing managers each year.

He invented the "vitality curve," in which managers were ranked into three groups. The top 20% "A" group was "filled with passion, committed to making things happen." The "vital" 70% "B" group was essential to the company and encouraged to join the A's.

Then there was the bottom 10% "C" group.

Jack Welch, former chairman and CEO of GE, dies at 84 https://t.co/1WQPj2QRKp

1.17pm GMT

Airline group IATA are now calling for the 'use it or lose it' rules on landing slots to be relaxed.

Currently, an airline can lose its rights to land at an airport if it doesn't fly at least 80% of planned flights (a rule designed to prevent incumbents from restricting new operators for breaking into the market).

NEW: IATA calls for runway slot rules to be relaxed amid #covid19 #coronavirus outbreak - the so called use it or lose it rule (80-20) pic.twitter.com/l0BA2WNdOF

1.10pm GMT

Bavarian newspaper Passauer Neue Presse is reporting that a BMW worker in Munich has contracted coronavirus.

This means 150 employees at its R&D centre have been sent home to self-quarantine.

Some 150 people at the @BMW Research & Development Centre are being quarantined at home for two weeks after coming into contact with an employee who has #CoronaVirus pic.twitter.com/3pRDdwIhqz

1.03pm GMT

Here's our news story on the Bank of England's pledge to to what it can to support the UK economy through the coronavirus crisis.

12.52pm GMT

Mark Kleinman of Sky News has learned that the coronavirus crisis has scuppered Saga's plans to sell its Titan Travel division (which runs escorted holidays for the over 50s).

Exclusive: The coronavirus outbreak has prompted Saga, the struggling travel and financial services group, to postpone the sale of Titan Travel, which provides escorted holidays such as cruises for the over-50s. https://t.co/MHxS5neQP9

12.45pm GMT

The European Central Bank has now waded in, pledging to act where it can to protect the eurozone economy from the coronavirus.

Speaking in London now, ECB vice-president Luis de Guindos says there had been signs of "stabilisation" in the euro area and an improving global growth outlook in recent weeks.

Over recent weeks, however, the coronavirus added a new layer of uncertainty to global and euro area growth prospects. The outbreak has the potential to affect the euro area economy through both demand- and supply-side channels. Euro area foreign demand could be directly hit as a result of quarantine measures in China and the associated suspension of production lines. This may affect euro area exports, and could cause disruption in global supply chains and the production of intermediate products. The euro area services sector, too, could be affected by travel disruptions. If the virus spreads more widely, domestic firms could be more directly affected due, for example, to supply chain delays.

We remain vigilant and will closely monitor all incoming data. Our forward guidance steers the orientation of our monetary policy. In any case, the Governing Council stands ready to adjust all its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner.

Speech Luis de Guindos: Remarks at the EEFC Distinguished Speakers Seminar https://t.co/qOeg80Uaof

12.34pm GMT

Sorry, small typo in that last post. International Airlines Group own British Airways and Iberia, as well as Aer Lingus, budget airline LEVEL and Vueling.

12.28pm GMT

Travel stocks are sinking lower in London.

IAG (which runs British Airways and Iberia airlines) are down 11%, followed by cruise operator Carnival (-7.5%) and easyJet (-5.7%).

11.45am GMT

So much for the market rebound!

The FTSE 100 has just dropped into negative territory for the day, having been more than 2% higher at the open.

11.40am GMT

Shares in UK supermarkets are rallying today, amid signs that UK consumers are stockpiling essential goods in case of a coronavirus pandemic.

Sainsbury's are up 2.8%, with Morrisons close behind. Ocado has gained 1.6%, while Tesco are 1% higher.

Out of stock on hand sanitisers on Ocado pic.twitter.com/tijqzjkuHx

11.26am GMT

Foreign exchange provider Travelex warned this morning that the coronavirus will dent its business.

The outbreak of Covid-19 is an incremental negative for Travelex's business given broad exposure to airports and travel flows. VAT and related services will also be negatively impacted.

While China and other Asian in-country revenue account for approximately 10% of Travelex revenues, other markets closely linked to Asian outbound travel are also experiencing headwinds.

11.11am GMT

The OECD's warning that global growth could be halved this year is dampening the mood in the markets.

Wall Street futures have been falling steadily, and the S&P 500 is no longer expected to rally today.

And it's gone pic.twitter.com/KuHYmghih1

"The OECD has said that a 'longer lasting and more intensive coronavirus outbreak' could cause economic growth to halve in 2020, to just 1.5%, and markets are now heading back down in reaction.

"For investors it means putting up with a lot more volatility to come - this event is unfortunately far from over and trying call when to buy and sell in the face of such an unknown event is virtually impossible. While many stocks look cheap now, they could get a lot cheaper before this crisis is over."

10.54am GMT

In a press conference in Paris, Laurence Boone, chief economist at the OECD, has warned that central bankers cannot protect economies from coronavirus on their own.

Boone told reporters that central banks need to play their part, by offering to ease borrowing costs and provide banks with liquidity in the event of a further downturn.

"We do not think this is a shock that can be managed by central banks alone."

10.44am GMT

Nike has temporarily shut its European headquarters in Hilversum, the Netherlands, after an employee was infected with the coronavirus. The HQ is being disinfected (our main coronavirus liveblog has more details)

Goldman Sachs has joined the ranks of companies banning all "non-essential" travel and putting in place specific restrictions on travel to China, South Korea, Italy, and Iran, according to an internal memo.

Staff who have recently visited China and South Korea have also been told to self-isolate away from the office for two weeks.

"We are closely monitoring new developments regarding COVID-19 and calibrating the firm's global response on a daily basis," the bank wrote in the memo to staff. Goldman Sachs declined to comment.

Every CFO who has ever insisted that a lot of business travel is frivolous is about to get the A/B test of their careers.

10.25am GMT

The European stock market rally didn't last long.

After just two hours, the Stoxx 600 has faded back towards last Friday's closing levels.

*STOXX 600 REVERSES GAINS AND TURNS FLAT, HAD RISEN 2.3%

10.20am GMT

There are some hefty downgrades in the OECD's new growth forecasts, as this chart shows:

The OECD is slashing China & India GDP growth by a lot vs their forecasts in November pic.twitter.com/JXuwUF9FIt

10.10am GMT

Here's our news story on the OECD's coronavirus growth warnings:

10.09am GMT

Newsflash: The coronavirus outbreak is plunging the world economy into its worst downturn since the global financial crisis, the Organisation for Economic Cooperation and Development warns.

In its latest economic forecasts, the OECD has slashed its G20 growth forecast for 2020 to just 2.4%, from 2.9% predicted three months ago. It is now gloomier about growth in China, the eurozone and the UK - and fears Japan will barely expand at all.

9.54am GMT

Back in the markets..... the FTSE 100 is losing some of its early bounce.

It's still rallying - up 1.2% at 6656. But that's only a 77-point gain, having been up 177 points at the open.

9.40am GMT

Newsflash: UK factories are also struggling to get their hands on parts from China, just like their eurozone rivals.

Supply- chain disruptions across British industry are "rapidly emerging" as the outbreak of COVID-19 led to sizeable raw material delivery delays, rising input costs and increased pressure on stocks of purchases.

The effects of the COVID-19 outbreak had a noticeable impact on supply chains during February. Average vendor lead times lengthened to the greatest extent since July 2018, while the eight-point drop in the level of the seasonally adjusted Suppliers' Delivery Times Index was the largest in the 28-year survey history.

Recent storms and flooding in the UK also had an impact.

9.28am GMT

The mood in the City today is much calmer than during last week's manic sell-off, says Russ Mould, investment director at AJ Bell.

"There is a semi-reversal of last week's sector trends with healthcare and infrastructure-related stocks no longer in favour and heavily sold-off industrial and mining stocks leading the charge upwards.

"However, airlines were still in the doldrums with International Consolidated Airlines falling 6% and EasyJet down 1.4%.

9.26am GMT

Britain's City watchdog, the FCA, says it is working closely with the financial services sector to ensure they can keep operating in the face of coronavirus.

Reuters has the details:

"This is in conjunction with the Bank of England," an FCA spokesperson said.

"As you would expect we have been in contact with a wide range of firms across the sector. We expect all firms to have contingency plans in place to deal with major events so that they are able to continue operating effectively.

9.17am GMT

Newsflash: Eurozone factories suffered falling exports last month, as the coronavirus outbreak hit demand for goods.

Manufacturers have also reported longer delays to get raw materials and parts, due to the ongoing disruption to Chinese supply chains.

"The concern is that coronavirus-related delays in shipments threaten to constrain production in the coming months, prolonging a downturn that already extends to over a year. Supply chains are lengthening to an extent not seen since 2018 and inventories are being depleted at a rate rarely seen over the past decade as companies struggle to produce enough to satisfy order books.

"Furthermore, while a return to work for many Chinese factories after the extended New Year holiday could help ease global supply constraints, any further spreading of the COVID-19 epidemic risks driving increased risk aversion and a reduction of spending by both businesses and consumers."

9.01am GMT

Every sector of the FTSE 100 index is up this morning, as stocks rebound from last week's rout:

8.55am GMT

Oil is also rallying. Brent crude has gained almost 4% to $51.59 per barrel, suggesting that fears of a global recession are easing (for the moment, anyway).

8.42am GMT

Newsflash: The Bank of England is promising to take "all necessary steps" to support the UK economy from the impact of coronavirus.

A spokesperson says:

"The Bank continues to monitor developments and is assessing its potential impacts on the global and UK economies and financial systems.

The Bank is working closely with HM Treasury and the FCA - as well as our international partners - to ensure all necessary steps are taken to protect financial and monetary stability."

The Bank of England follows the US Federal Reserve and the Bank of Japan in pledging to support markets in the face of the coronavirus outbreak

*BANK OF ENGLAND WILL TAKE ALL NEEDED STEPS TO PROTECT STABILITY

8.41am GMT

Airline shares are still under pressure this morning, with British Airways parent company IAG down 4.7%. EasyJet has lost another 1%.

Travel and Leisure not taking part in this rebound in markets this morning

IAG, Easyjet and Ryanair all lower, though TUI is higher.

8.36am GMT

The smaller FTSE 250 index is also bouncing back, up 2.5% or 483 points at 19815.

8.36am GMT

Savers and pension-holders will be relieved to see stocks rallying in London, after suffering significant losses last week.

But it's (obviously) too early to say this crisis is over. Even if a global pandemic can be avoided, the global economy still faces months of disruption to supply chains.

For now a recession remains a risk case-not our base case. The correction over the past week has been dramatic and understandably a reason to be concerned.

The sizable though not recessionary hit to global growth is also being met with a policy response to mitigate some of the negative economic consequences. This should ultimately bode well for risk assets, but volatility is likely to remain high in the near term until this path becomes more apparent."

8.29am GMT

Most European stock markets are rallying in early trading, although not quite as strongly as London.

Hopes of co-ordinated central bank action are rising, following the Bank of Japan and the Fed's pledges to act where needed.

8.11am GMT

Britain's FTSE 100 index has opened sharply higher, as investors try to put last week's mayhem behind them.

The blue-chip has rallied by 177 points, or 2.7%, to 6758. Every share is up, in a burst of optimism ripples through the trading floors.

8.04am GMT

France's top central banker has said the European Central Bank could take more actions to protect the eurozone economy from the coronavirus.

Francois Villeroy de Galhau, an ECB policymaker, told French radio that household consumption could be hit if the crisis intensifies, adding:

"If more was needed and we were convinced that it would be effective, then we can do more, but we are not there yet.

7.57am GMT

Our main coronavirus liveblog is covering all the latest developments - here's their latest summary:

7.48am GMT

China's stock market is leading the rally today, with the CSI 300 index jumping over 3%.

China's #stock market soared 3.2% or 92 points on Monday, as investor confidence is boosted by the significant decline of new #coronavirus infections in Wuhan City for the past 24 hours. The city reported 193 new confirmed cases & the province reported 3 more. pic.twitter.com/L9Sy57YanI

#China's sizzling stocks rebound spurred by bets that dire PMIs mean authorities to release ample fiscal & monetary easing. Reasoning seems to be that, if bad news is good news, then awful news must be fantastic! Rally rooted in such hopes is built on sand, Bloomberg's Ma writes. pic.twitter.com/ny6MEnx7yT

7.47am GMT

Investors are shrugging off the news that China's factories have had their worst monthly slump on record.

Earlier today, Caixin's survey of Chinese manufacturing output sank to just 40.3, from 51.1 in January. That's its lowest level since it began in 2004, and signals a very sharp contraction.

7.33am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

"Overseas and domestic financial markets continue to make unstable movements due to heightening uncertainty over the impact on the economy from the spread of the coronavirus.

"The Bank of Japan will closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases."

The death toll in China rose to 2,912, but it is also creeping up in other countries. Iran has the second highest number of deaths, with 54, Australia reported its first Covid-19 death over the weekend.

Infections nearly doubled over the weekend in Italy - Europe's hardest-hit country with nearly 1,700 cases.

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