Aslew of profit warnings on Wednesday and general corporate alarm over the potential fallout from the coronavirus epidemic highlighted the prescience of stock market investors in the previous few days.

European stocks were down 9 per cent at one point, touching levels not seen since the end of last year. They recovered slightly in afternoon trading as Wall Street opened with a rally, but are still roughly 5.5 per cent weaker over the past three days.

As the Financial Times noted, the sell-off “has developed into one of the most significant retreats since the 2008-09 financial crisis”, with investors responding to the increasingly global spread of the virus by heading for safe havens such as gold and gilts.

French food giant Danone said the outbreak would mean a €100 million hit to first-quarter sales

Sentiment was hardly helped by the Tuesday warning from the US Centers for Disease Control and Prevention that the epidemic was likely to cause “severe” disruption to economic life in the US.

On Wednesday, Guinness parent Diageo warned the spread of coronavirus in China and the Asia Pacific region alone could knock up to €240 million off its 2020 profit as bars and restaurants stay shut – though it is its whiskey brands that are suffering, not stout.

Infant formula

And French food giant Danone said the outbreak would mean a €100 million hit to first-quarter sales, mainly in its water business in China. Danone also generates about 30 per cent of its infant formula sales in China and 10 per cent of its overall sales.

And all that is before companies even begin to assess the impact of a wider global spread.

US oil giant Chevron on Wednesday sent home 300 workers from its London office after a returning employee reported flu-like symptoms. And, somewhat ironically, Fiat Chrysler, which first warned that European plants might have to close because Chinese suppliers could not deliver, could now find itself crippled because of the closure of automotive electronics plant MTA in the northern Italian town of Codogno. Failure to get MTA’s 600 workers back in action within days could see all Fiat Chrysler plants in Europe close, with BMWRenault and Peugeot also affected.