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What to Watch: Coronavirus hits oil and stocks, Barclays shock, and Centrica

Tom Belger
Finance and policy reporter
Coronavirus fears hit oil prices. (Photo by: Education Images/Universal Images Group via Getty Images)

Here are the top business, market and economic stories you should be watching today in the UK, Europe, and abroad:

Coronavirus hits oil forecasts, stocks and euro

Markets had reached record highs in Europe on Wednesday, amid hopes Chinese authorities’ tough quarantine measures would help to contain the spread of the flu-like virus.

But the outbreak sent stock markets tumbling again in early trading on Thursday. The death toll from coronavirus leapt to 1,350 worldwide after a change in how infection rates are measured in China.

Germany’s DAX (^GDAXI) dropped by 0.3%, while France’s CAC 40 (^FCHI) was down 0.2%. The FTSE 100 (^FTSE) in London fell further, sinking 0.9% as announcements from Centrica (CNA.L) and Barclays (BARC.L) also weighed on shares.

The virus also hit oil prices as the International Energy Agency (IEA) predicted the first quarterly drop in oil prices in a decade. It expects a short-term fall in Chinese demand in the first quarter of 2019, according to Reuters. Futures in West Texas intermediate crude (CL=F) were down 0.8%, while brent crude prices (BZ=F) slid 0.6%.

READ MORE: Euro near three-year lows on coronavirus fears

Meanwhile the euro fell close to three-year lows as the EU warned coronavirus was a “key downside risk” to economic growth.

In Asia overnight, China’s SSE Composite Index closed down 0.7%, Hong Kong’s Hang Seng Index (^HSI) slid by 0.3%, and Japan’s Nikkei (^N225) lost 0.1%.

Barclays CEO probe over Epstein links

Barclays (BARC.L) announced on Thursday its chief executive is under investigation by UK authorities amid questions over his relationship with the disgraced former financier Jeffrey Epstein.

Financial regulators in Britain are probing CEO Jes Staley’s “characterisation” of his relationship with Epstein, Barclays said, and how the company then described it in evidence given to regulators.

Staley told journalists on a conference call he had been “very transparent”. He said he had known Epstein as a client from his time at JP Morgan’s private banking team in the 2000s. Epstein committed suicide last year while under arrest facing charges of underage sex trafficking.

The shock announcement overshadowed Barclays’ better-than-expected 2019 results reported on Thursday. Its full-year results beat market forecasts for profit, revenue and return on tangible equity, but its shares slid 2.3% on the probe.

British Gas owner Centrica crashes to £1.1bn loss

Centrica (CNA.L) on Thursday posted a pre-tax loss of more than £1.1bn ($1.4bn) for its 2019 financial year, as the British Gas owner pointed to the recently introduced government energy price cap and falling natural gas prices.

While revenues declined by just 3% to £22.7bn, profits before fell by almost 300%, from £575m in 2018.

The company was dented by a series of one-off accounting charges, including a £476m charge related to the writing down of its upstream oil and gas exploration and production assets.

It also spent £356m on its cost-reduction programme, which has seen it axe thousands of jobs in recent years.

What to expect in the US

US stocks also looked set for a lower open on fresh gloom over the scale of the outbreak, after a change in how infection rates are measured in China pushed up the death toll.

Dow Jones futures slid 0.5% (YM=F), the S&P 500 looked set to lose 0.4% (ES=F), and Nasdaq futures slid 0.6% (NQ=F) in early trading in London on Thursday.