Coronavirus latest: Airline stocks hit as Warren Buffett jettisons investments

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Carnival to resume some North American cruises in August

Cruise operator Carnival will resume some services in North America this summer, while extending a temporary suspension in services elsewhere in North America and Australia as it looks to gradually restart operations.

The Miami-based company said all North American cruises from June 27 to July 31 have been cancelled, but that beginning August 1, it will resume services with eight ships from Miami and Port Canaveral in Florida and Galveston, Texas.

Carnival added that cruises in other parts of North America and in Australia have been scrapped until the end of August.

“We are committed to supporting all public health efforts to manage the Covid-19 situation,” the company said in a statement. “We are taking a measured approach, focusing our return to service on a select number of homeports where we have more significant operations that are easily accessible by car for the majority of our guests.”

The plans come even as the US House Committee on Transportation and Infrastructure on Friday opened a probe into the cruise operator requesting documents about its coronavirus response. More than 3,700 passengers were quarantined for more than 20 days off the coast of Japan on the Carnival-owned Diamond Princess after the virus erupted on the ship earlier this year. The letter from US lawmakers cited media reports noting “at least nine of Carnival’s ships have been infected with Covid-19 resulting in more than 1,500 confirmed infections and at least 39 deaths”.

Carnival shares slid 3 per cent on Monday and are down about 75 per cent year-to-date.

Lockdown helps Met target organised crime, says senior officer

London’s Metropolitan Police have taken advantage of a reduction in some types of crime during the coronavirus crisis to seek out “wanted offenders” in an effort to curb post-lockdown offences, Robert Wright reports from London.

Laurence Taylor, deputy assistant commissioner for operations at the UK’s largest police force, said the Met had experienced a shift in demand from “volume” crimes, such as disorder at pub closing times, to enforcing lockdown laws.

It has meant that we can have possibly a greater focus on some of those areas of serious criminality.

Read Robert’s full story

Hundreds of asylum-seekers leave overcrowded Greek camp

Kerin Hope in Athens

Almost 500 asylum-seekers left the overcrowded Moria camp on the Greek island of Lesbos over the weekend under a scheme to prevent the spread of coronavirus on the island, the migration ministry said.

No confirmed cases of Covid-19 have been reported at any of the reception centres hosting some 38,000 asylum seekers in poor conditions on five eastern Greek islands. Six Greek residents of Lesbos infected with the virus have all recovered, health authorities said.

Medical facilities at Moria have been extended to provide coronavirus testing for residents and two isolation areas for suspected cases.

The latest departures brought the number of asylum-seekers moved to new accommodation to around 870. Most were transferred to camps on the mainland, but some 250 vulnerable people, mostly elderly or with chronic diseases, are staying at hotels on the island, a UNHCR official said. About 19,000 migrants and refugees remain in Moria.

The flow of arrivals by small boat from Turkey fell to less than 100 in April, following a stand-off on the Greek-Turkish land frontier over an Ankara-backed attempt by several thousand refugees to break through a border fence and enter Greece. The Greek government says it intends to deport most of the 110,000 asylum-seekers living in camps on the mainland.

EmoticonUS stocks open lower

Global stocks fell as tensions flared between the US and China over the origin of the coronavirus pandemic.

On Wall Street the S&P 500 slipped 0.7 per cent in the early minutes of trading, while the Dow Jones lost 1 per cent and the tech-weighted Nasdaq was 0.5 per cent lower.

The falls came after Mike Pompeo, US secretary of state, on Sunday reiterated US government claims linking the coronavirus outbreak to a laboratory in Wuhan, China, without providing any evidence. China has denied the virus came from the lab.

In Europe, the benchmark Stoxx 600, which tracks the region’s largest companies, fell 2.5 per cent by mid-afternoon. The losses were sharpest in continental Europe, where markets had missed out on Friday’s sell-off because of a public holiday. In Frankfurt, the Dax fell 3.8 per cent, while the CAC 40 in Paris was 4.2 per cent lower. London’s FTSE 100, which had fallen more than 2 per cent in the previous session, slipped a further 0.1 per cent.

“The last thing we need is more trade war,” said Kit Juckes, a strategist at Société Générale.

Italy’s coronavirus outbreak may have been deadlier than first thought

Valentina Romei

Italy’s Covid-19 outbreak may have taken far more lives than initially thought, according to the first near-nationwide assessment by the government.

Only half of the deaths earlier this year in Italy in excess of normal levels were diagnosed as coronavirus, the official data show.

Italy registered nearly 91,000 deaths between February 20 and March 31, compared with the average over the past five years for that period of 65,600, an increase of 39 per cent. However, only 54 per cent of the 25,300 excess deaths were diagnosed as Covid-19, according to a report by Italy’s Office for National Statistics together with the National Health Institute.

The 11,600 excess deaths that were not diagnosed as Covid-19 could have been linked to people not being tested or fatalities caused by the crisis of the health system, particularly in severely hit areas, the health institute said.

Italy’s excess deaths during the early weeks of the outbreak were almost exclusively concentrated in the north of the country, where the number of fatalities rose by 73 per cent compared to the average of the last five years. In some provinces of that region, such as Bergamo, deaths jumped by 568 per cent.

Across the north, only 52 per cent of the excess deaths were diagnosed as Covid-19. In the centre and south of Italy, the number of fatalities between February 20 and the end of March rose by an average of 4 per cent, with 80 per cent of excess deaths attributed to Covid-19.

EU pushes for “decentralised” tracing apps consensus among members

Javier Espinoza in Brussels

The EU is pushing member states to agree to a ‘decentralised’ approach when it comes to deploying tracing apps to help contain the coronavirus pandemic.

Speaking at the European Parliament, executive vice-president Margrethe Vestager said officials were working hard to build consensus. She said:

We are actively discussing with member states how to build a system where existing apps can talk to one another so cross border travel becomes a thing that’s safe to do…It’s more difficult to make apps work together if one stores on your phone and the other stores centrally…This is why we have been working with member states to have a consensus that goes in the direction of decentralised storage. We hope that we can go in that direction.

Her comments followed reports that European countries are split over the different approaches to deploy tracing apps, raising concerns about interoperability between platforms and the efficiency of the technology to tackle the crisis.

Experts have raised concerns that using both centralised and decentralised apps would lead to lack of interoperability between them, undermining efforts to trace people once travel within countries is permitted again.

However, Ms Vestager sounded hopeful of building consensus around a decentralised system, which would be supported by a system being developed by Apple and Google.

“More and more countries are coming to have that approach,” she added.

JPMorgan turns more positive on US stocks

JPMorgan expects Wall Street to outperform European markets, largely thanks to the considerable policy response to the pandemic from Washington and the Federal Reserve.

“The US is benefitting from stronger fiscal stimulus and greater Fed backstops,” the bank’s global equity strategists said in a note to clients on Monday.

US markets also have a greater alignment with the bank’s preference for defensive and growth stocks, given that it still sees the potential for new declines ahead.
JPMorgan has shifted its global portfolio to give a greater weighting to US stocks, which it is now neutral on. It has downgraded eurozone stocks from overweight to neutral.

The S&P 500 is trading around 15 per cent lower than its late-February highs, while the Stoxx Europe 600 is still nearly 25 per cent off its levels in February.

While the eurozone should have benefited from trade uncertainty easing, and while it is trading cheap on most valuation metrics, its sector tilts are a drag and the policy response is weaker.

Japan extends state of emergency until end of May

Leo Lewis in Tokyo

Japan’s prime minister, Shinzo Abe, has formally extended the country’s state of emergency until the end of May, keeping restrictions in place but hinting that some of these could be relaxed sooner if the rate of new infections is brought down.

The widely expected extension and Mr Abe’s call on the public to adopt a “new lifestyle” comes almost a month after the original state of emergency was announced for Tokyo and several other prefectures on April 7. It was shortly afterwards extended to the rest of the country.

The decision to declare an emergency came nearly three months after Japan detected its first coronavirus case in mid-January and began its protracted battle to bring the disease under control. Fears remain that Japan’s medical system, which has a smaller ratio of intensive care beds to population than Italy, could break down if infections continue to rise.

Mr Abe admitted that the strains on the medical system are still severe, and that the number of patients in critical condition had tripled since the emergency declaration was made in early April.

Unlike stricter, legally enforced responses elsewhere, Japan’s strategy has involved a combination of the formal closure of many public spaces and a hope that individuals will engage in voluntary social distancing and effect an 80 per cent reduction in person-to-person contact. Under this system, small restaurants and other businesses have been able to stay open.

The prime minister pledged a review of the situation around the middle of the month, with museums, libraries and some other facilities now likely to reopen if they take sufficient precautionary measures. No firm date has yet been set for when schools will reopen. Officially, Japan has recorded more than 15,000 cases and 550 deaths.

Airline stocks hit as Buffett jettisons aviation investments

US airline stocks took a hit on Monday after Warren Buffett said he ditched his investments in carriers during the coronavirus pandemic.

Shares in Delta Air Lines, United and American Airlines tumbled 10 per cent, while Southwest fell 8 per cent in pre-market trade.

Mr Buffett said during Berkshire Hathaway’s virtual annual meeting that he exited all four carriers in April, as the investment vehicle sold more than $6bn in stock related to airline trade.

“It turns out I was wrong,” he said. “The airline business — and I may be wrong and I hope I’m wrong — I think it has changed in a very major way.”

Airlines worldwide have sharply reduced capacity as governments have issued stay at home orders and travellers choose to stay home to curb the spread of Covid-19. United Airlines has drawn up plans to reduce its workforce if air travel does not rebound as it currently burns about $50m in cash per day amid a drop in demand.

Mr Buffett’s comments had a knock-on effect on the broader airline industry as well, as shares in JetBlue and Alaska Air fell 10 and 9 per cent respectively in pre-market trade. The broader US Global Jets exchange traded fund fell 8.3 per cent.

Ferrari slashes earnings outlook on hit to F1 income

Peter Campbell in London

Ferrari downgraded profit estimates by up to 17 per cent on Monday after predicting a “harsh reduction” of income from Formula 1 and its branding division because of coronavirus.

The supercar maker sold 2,738 cars in the first three months of the year, booking €220m of pre-tax profit, down 5 per cent against a year ago, on revenues that were 1 per cent lower at €932m.

Deliveries of the 488 Pista and the 488 Pista Spider, along with the ramp up of the F8 Tributo, helped car shipments to grow by 5 per cent in the quarter.

Ferrari lowered full year pre-tax profit guidance to €600-800m, down from the previous range of €950m-€1bn, with expected revenues downgraded from €4.1bn to €3.4-3.6bn.

The group expects a “significant reduction in Formula 1 revenues” during 2020 with races cancelled or held without fans present, as well as predicting a “substantial reduction in turnover” in the business unit that licenses its brand.

The group’s factories, which have been shuttered since March 14 because of coronavirus, reopened this week and are expected to reach full production levels by Friday.

Scotland sets out post-lockdown containment plan

Mure Dickie in Edinburgh

The Scottish government has set out details of the “test, trace, isolate, support” approach it hopes to use to contain coronavirus after an easing of the current lockdown, but stressed that it was too early to set a date for such a relaxation.

The lockdown is to be formally reviewed on Thursday, but Nicola Sturgeon, Scotland’s first minister, made clear there would be no substantial shift in her government’s guidance then. The UK government is expected to set out details of its thinking on a relaxation on Sunday.

Ms Sturgeon told her daily coronavirus briefing:

I cannot see the circumstances based on the evidence I’m looking at … of me being able to stand up here on Thursday and say we are lifting elements of the lockdown in any significant or meaningful way at all.

In a paper published on Monday, the Scottish government said it was preparing to test people in the community who have Covid-19 symptoms, then use contact tracing to identify their close contacts and then ask and support those close contacts to self-isolate.

“‘Test, trace, isolate, support’ will be most effective when levels of infection are low — lower than now,” the paper said. “Its success relies on all of us knowing and agreeing what to do if we have symptoms, and being prepared to self-isolate when advised to do so.”

Tyson warns of meat sale declines and higher costs

Tyson Foods, the largest US meat company, reported disappointing quarterly results and said it expects sales volume to fall in the second half of the year and costs to rise as it contends with the coronvirus pandemic.

The Arkansas-based company said: “The volume increases in retail have not been sufficient to offset the losses in foodservice and as a result, we expect decreases in volumes in the second half of fiscal 2020.” The company also said it expects to continue to experience lower productivity and higher production costs “until the effects of Covid-19 diminish” and that it is unable to “provide segment adjusted operating margin guidance”.

Last week, Tyson Foods warned of shortages for consumers, saying the country’s complex food chain was “breaking” as it shut slaughterhouses.

The news accompanied fiscal-second quarter results that showed a 4 per cent year-on-year rise in sales to $10.88bn, which missed analyst expectations for $10.96bn. Net income slid to $364m or $1 a share, down from $426m or $1.17 a share in the quarter a year ago. Adjusted earnings of 77 cents a share missed analyst expectations.

“During the quarter, we witnessed an unprecedented shift in demand from foodservice to retail, temporary plant closures, reduced team member attendance, and supply chain volatility as a result of the virus,” the company said.

Tyson shares fell 7 per cent in pre-market trade to $56.

US conspicuous by its absence on list of G20-backed donor event

Michael Peel in Brussels

Washington appears to have ducked a high-profile international coronavirus donor event aimed at raising an initial $8bn to boost testing, treatment and development and distribution of a vaccine.

No US government representative is listed on a programme of interventions to be made by leaders or other senior officials from more than 40 countries at Monday’s pledging conference, which is backed by the G20.

Zhang Ming, China’s ambassador to the EU, will represent his nation at the event moderated by Ursula von der Leyen, European Commission president.

Washington has given money through other means to likely beneficiaries of the conference including Gavi, an international organisation that uses donor funding to supply vaccines to the world’s poorest countries.

UK publishes membership list for ‘Sage’ advisory group

George Parker in London

The government has published a long-awaited list of members of the government’s scientific advisory group on emergencies (Sage), the key body providing evidence on coronavirus to ministers.

The list does not include the names of those who wished not to be identified, nor does it include the names of government officials who “attend” the meetings, such as the prime minister’s chief adviser Dominic Cummings.

The government said the list named “participants who provided input as experts at one or more meetings, including public servants who acted in an expert capacity”.

Greg Clark, Commons science and technology committee chairman, said: “I strongly welcome the commitment to transparency made by SAGE in publishing the names of the members.”

This was something my committee called for in order to provide public reassurance that Government decisions are informed by a broad and substantial body of expert advice.

Two members of Sage asked not to be named.

A round-up of this morning’s news

Spain is heading for a political confrontation over its harsh lockdown as the daily coronavirus death toll remains at virtually its lowest point since the measure was imposed more than seven weeks ago. The prime minister insists no other option remains but to maintain the state of alert.

Loosening the lockdown: Many European countries are taking tentative steps to ease the strict measures that have kept so many housebound for weeks. Germany is gradually reopening places such as barber shops and hair salons while Italians can visit relatives for the first time in nine weeks. Spain over the weekend allowed its citizens to exercise outdoors for the first time since mid-March. Masks will become more visible on streets and buses as many governments make it mandatory to wear them on public transport. Elsewhere, Iran is set to hold Friday prayers this week and has reopened some mosques.

Takeaway coffee from a cafe in Rome

Company news: Air Canada expects it will take at least three years to recover to 2019 levels of revenue and capacity while US fashion group J Crew, the private-equity backed group known for its preppy style, has filed for bankruptcy protection, becoming the first major US retailer to be pushed over the edge by the pandemic.

Markets: Global stocks tumbled as tension flared between the US and China over the origin of the outbreak. In Europe, the benchmark Stoxx 600, which tracks the region’s largest companies, fell more than 2 per cent. The losses were sharpest in continental shares since markets had missed out on Friday’s sell-off because of a public holiday.

Economic news: Experts have slashed their forecasts for eurozone growth, inflation and jobs, the latest European Central Bank survey of professional forecasters shows. Hong Kong meanwhile has shrunk at the fastest quarterly and annual rate on record as the pandemic has disrupted supply chains. The territory’s first-quarter gross domestic product decreased by 8.9 per cent, the sharpest decline from the same period a year earlier since records began in 1974.

Air Canada warns that recovery of capacity will take over three years

Air Canada expects that it will take at least three years to recover to 2019 levels of revenue and capacity, in the latest warning of the prolonged recovery ahead for the beleaguered airline industry.

The North American airline said that it had reduced its capacity by 85 to 90 per cent for the second quarter and it foresaw cutting it by three-quarters for the third quarter of this year compared with a year earlier, due to ongoing travel restrictions and lower passenger demand.

“We are now living through the darkest period ever in the history of commercial aviation,” said Calin Rovinescu, chief executive of Air Canada. “We expect that both the overall industry and our airline will be considerably smaller for some time, which will unfortunately result in significant reductions in both fleet and employee levels.”

The gloomy outlook came as the group reported that it failed to grow revenue for the first time in 27 quarters on a year-on-year basis and that it fell to an operating loss of $433m, versus operating income of $127m a year before.

UK sets up mask-making industry after Scotland stumps up loan

Andy Bounds in Huddersfield

The UK is creating a domestic industry to make vital FFP3 respirator masks after the Scottish government provided a loan to a manufacturer of the rare filter material needed.

Don & Low has bought a machine to produce fabric used in the type of masks required for close contact with coronavirus patients.

Scotland has provided £3.6m of finance for the £4.5m investment.

The textile maker will supply meltblown material, of which there is a global shortage, sufficient to make 125m masks annually, with priority for the National Health Service and government. The company already makes material for FFP2 grade masks, which block only 95 per cent of potentially infectious particles.

Production will start in October. US business 3M is the only maker in the UK of the material and FFP3 masks so London has had to buy supplies from around the world in a competitive market.

Many NHS staff say they are still short of such vital equipment.

“Covid-19 isn’t going away any time soon,” said Scottish trade minister Ivan McKee, “so while we have enough masks to protect our frontline health and social care workers now, we are also taking a long-term view to build PPE manufacturing capability in Scotland to meet future needs.”

Spanish lockdown extension sparks political standoff

Daniel Dombey in Madrid

Spain is heading for a political confrontation over its harsh lockdown, as the country’s daily coronavirus death toll remains at virtually its lowest point since the measure was imposed over seven weeks ago.

Pablo Casado, the main opposition leader, said that there was now no point in his centre right People’s party backing a further two week extension of the state of alert, the extraordinary legal order underpinning the lockdown. This gives sweeping powers to the central government to rule by decree but is due to expire on May 10.

Pedro Sánchez, prime minister, maintains there is no other option but to continue the state of alert, since the government plans to phase out the lockdown only very slowly, in several phases until the end of June or mid-July.

Mr Sánchez says the lockdown is working: according to health ministry figures released on Monday, the daily death toll remained at 164 for the second consecutive day, the lowest level since March 18, barely three days into the lockdown. In the 24 hours to 9pm on Sunday, just 356 people nationwide tested positive for coronavirus in relatively reliable PCR tests — a mere 0.16 per cent increase on the previous day’s figure, bringing the official accumulated number of cases to 218,011. Such low numbers may however be influenced by slower reporting times over the weekend.

But Mr Casado — who has to date voted in favour of the lockdown, despite his bitter criticism of the government — said the opposition would not give in to “blackmail”. He contends that the government could instead achieve its objectives through legislation both in terms of restricting mobility and providing economic aid.

Several of Spain’s regions have also objected to the central government’s plans to relax the lockdown, calling for a return to more devolved power. The chamber of deputies, in which Spain’s left wing coalition government is far short of a majority, is set to debate and vote on the state of alert and the lockdown on Wednesday.

Iran to reinstate Friday prayers and reopen mosques

Najmeh Bozorgmehr in Tehran

Iran is set to hold Friday prayers this week and has re-opened mosques in a handful of towns believed to pose a low risk to public health after about two months of closure.

Iran’s health ministry said that Friday prayers will be held in 157 towns this week while people could go to mosques in 132 towns as of Monday. Worshippers can spend a maximum of half an hour in mosques and have to wear face masks and gloves, while no tea can be served.

A ban on holding mourning ceremonies in mosques remains in place and the country’s main shrines in the holy cities of Mashhad and Qom will be closed until further notice.

The decision to halt group prayers and visits to shrines and mosques had faced initial opposition by hardline forces who believe holy sites could help to cure disease rather than infecting worshippers.

Iran’s death toll reached 6,277 on Monday, up from 6,203 a day before. A total of 98,647 individuals have now tested positive.

J Crew files for bankruptcy

US fashion group J Crew has filed for bankruptcy protection, becoming the first major US retailer to be pushed over the edge by the coronavirus pandemic.

The private equity backed company, known for its preppy styles, said on Monday that its parent Chinos Holdings had filed for Chapter 11 relief as the sector struggles to contend with the widespread closures brought in to stem the spread of Covid-19.

As part of the restructuring process, J Crew said it had reached a deal with its lenders to convert $1.65bn worth of debt into equity. It also said it had secured commitments for a debtor-in-possession financing facility of $400m. It will retain its Madewell brand as part of the agreement.

“This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J Crew and further enhancing Madewell’s growth momentum,” said Jan Singer, chief executive of the group.

J Crew had already been under pressure from its heavy debt load and had fallen out of favour with many American consumers following a series of design mis-steps in recent years. It also faced intense competition from lower-priced fast fashion retailers such as H&M and Zara. But the shock sent through the industry by the coronavirus pandemic proved to be the final straw.

Retailers in the US and around the world have been among the hardest hit by the outbreak, with much of the sector facing a historic crunch. Lockdowns across the US have forced the closure of hundreds of thousands of outlets and the National Retail Federation has suggested $430bn in industry revenues could evaporate over the course of the second quarter.

Hong Kong economy shrinks at the fastest rate on record in first quarter

Nicolle Liu in Hong Kong

Hong Kong’s economy contracted at the fastest rate on record on a quarterly and yearly basis, according to the latest government data, as coronavirus seriously disrupted local economic activities and supply chains.

The territory’s gross domestic product decreased by 8.9 per cent in the first three months of 2020 relative to the same period a year earlier, the sharpest decline since records began in 1974.

The fall in GDP was 5.3 per cent when compared to the previous quarter, which was also the steepest fall on record. The city has recorded four consecutive quarters of economic contraction since the second quarter of 2019.

Paul Chan, the financial secretary, said that: “Due to the events in our society and violent conflict last year, as well as the impact of the coronavirus outbreak recently, the three major engines of our economy — exports, consumption and investment expenditure — have stalled.”

The government last week revised the full year 2020 GDP forecast to a contraction range of 4 per cent to 7 per cent. The government estimate in February was that the economy would shrink by up to 1.5 per cent.

Coronavirus tracked: Has your country’s epidemic peaked?

The visual and data team at the Financial Times have created an interactive chart that enables you to explore data about the Covid-19 pandemic to track the infection’s spread around the world.

Find any country and customise the FT’s Covid-19 charts

Experts slash forecasts for eurozone growth, inflation and jobs

Martin Arnold in Frankfurt

Eurozone growth and inflation rates are expected to fall sharply this year, while unemployment is set to surge as the coronavirus crisis hits the region’s economy hard, according to the latest European Central Bank survey of professional forecasters.

In its first quarterly survey of experts since the pandemic froze activity across much of Europe, the ECB said on average they had forecast a 5.5 per cent contraction of the economy this year, compared with a 1.1 per cent growth forecast three months earlier.

Inflation is set to slow to 0.4 per cent this year, the 57 experts polled by the ECB predicted in the poll, which was conducted in the first week of April.

This was a sharp fall from their previous forecast for inflation to be 1.2 per cent this year, but it was in line with the fall in the inflation rate from 0.7 per cent in March to 0.4 per cent in April. It is well below the ECB’s core inflation target of just below 2 per cent.

Unemployment is expected to increase to 9.4 per cent in the eurozone, the experts predicted, a big increase from their previous forecast for the jobless rate to remain stable at 7.5 per cent. In March, eurozone unemployment was close to a 12-year-low at 7.4 per cent.

The experts forecast that growth, inflation and the labour market would recover next year. On average for 2021, they predicted growth of 4.3 per cent, inflation of 1.2 per cent and an unemployment rate of 8.9 per cent.

By 2024, the experts predicted that growth would be 1.4 per cent and inflation would be 1.6 per cent, both in line with their earlier forecasts. Unemployment, however, would remain stubbornly higher at 7.7 per cent, above their earlier forecast for it to fall to 7.3 per cent.

UK calls China out on Covid-19 outbreak

China has questions to answer on how speedily it made the world aware of the extent of the coronavirus crisis, the UK’s defence minister said, as concerns grow over future relations between the west and China.

“The time for the post-mortem on this is after we’ve all got it under control and have come through it,” Ben Wallace said on LBC radio. “It’s in everybody’s interest for us to be transparent.”

His comments on Monday come after US President Donald Trump raised the heat on China for its role in the spread of the virus by accusing it of trying to cover up a “horrible mistake” and pledging to soon release a “very conclusive report” on the origin of the disease.

Mr Wallace said that the difficulties in achieving a higher volume of tests in the UK was due to the shortage of reagents, not a lack of will.

“Testing would have improved all of our chances of understanding this virus,” he said.

If we had known from the outset more about the virus, then of course more lives could have been saved. I don’t think it’s a country-by-country problem. I think it is a massive problem around how we share intelligence on viruses and learning at pace.

He defended the government delaying to Sunday a decision on whether to extend, ease or lift the lockdown in order to make the right decision based on testing and analysis.

Global deaths slow for fifth straight day

Steve Bernard in London

The worldwide daily coronavirus death toll dropped to 3,481 yesterday, the fifth day in a row that the number has fallen. Sunday’s total represents the smallest daily increase since the end of March.

The US suffered an additional 1,158 deaths to push the total there to 61,760. This is the lowest daily figure since April 6, though the US still accounts for a third of all daily fatalities.

Globally, the number of newly confirmed Covid-19 cases climbed by 82,260 yesterday. This is the highest daily rise on a Sunday since the pandemic began. It brings the total number of infections to 3.4m.

You can explore data about the pandemic to better understand the disease’s spread and trajectory in the live-updating and customisable version of the FT’s Covid-19 trajectory charts, which are available here.

The data for the maps is provided by the European Centre for Disease Prevention and Control and now include care home deaths in the UK and France, which means the numbers will vary from our previous tallies.

Lockdown lunches: how to make sourdough pizza

Consumers have stockpiled essential ingredients during the coronavirus crisis, such as flour and yeast.

So FT food writer Tim Hayward shows the FT’s Daniel Garrahan, in the fourth of our lockdown cookery series, how to grow and feed a sourdough starter before turning it into a home-baked pizza.

Saudi’s Sabic suspends most capital expenditure

Simeon Kerr in Dubai

Saudi petrochemical giant Sabic said it would suspend all but essential capital expenditure as repercussions from the coronavirus pandemic weighed on demand.

The company said the negative impact of coronavirus would also affect demand and market sentiment in the second quarter “and potentially later this year.”

Sabic reported a first quarter net loss of 950m riyals ($250m), compared with a net profit of SAR3.41bn in the year-ago period.

“Sabic is committed to capital discipline and maintaining a strong balance sheet and has suspended all capex,” said Yousef Al-Benyan, chief executive.

Non-discretionary spending on “safe and reliable” operations and late stage projects would continue.

The first quarter results were impacted by a “challenging product-pricing environment” and lower demand caused by Covid-19, the company said.

Revenues were down 18 per cent, year on year. Sales decreased by 4 per cent and prices by 2 per cent from the fourth quarter of 2019.

Saudi Aramco, which is also cutting its spending, is set to complete the acquisition of the sovereign Public Investment Fund’s 70 per cent stake in the petrochemicals firm this year.

Italian factory executives report severe strain across industry

Valentina Romei

Italy’s manufacturing activity plummeted to the lowest level in more than 20 years as the coronavirus pandemic choked production and severely weakened domestic and global demand.

April’s IHS Markit purchasing managers’ index sank to 31.1 from March’s 40.3. This is a lower reading than during the financial crisis and it marks the worst performance since the survey began in 1997.

A reading below 50 indicates the majority of businesses reporting a deterioration in activity compared to the previous month.

“PMI data highlight the unprecedented and substantial damage from the coronavirus pandemic on the Italian manufacturing sector,” said Lewis Cooper, Economist at IHS Markit.

Last week, Italy’s office for national statistics revealed that the eurozone’s third-largest economy shrank 4.7 per cent in the first quarter of this year, the steepest contraction since the series began.

What you may have missed

President Donald Trump said he thought China made “a horrible mistake” on the virus outbreak, as he promised the US would soon release a “very conclusive report” on what had happened. Mr Trump said earlier that up to 100,000 people could die from coronavirus in the US, an upward revision of his previous forecasts.

French rules that will require arrivals from abroad to be quarantined for 14 days after arrival to prevent the spread of coronavirus will not apply to travellers from the EU, the Schengen zone or the UK.

Greece announced that wearing face-masks will be obligatory from Monday on public transport and at all medical facilities.

UK manufacturers of protective kit used to try to stop people catching coronavirus are struggling to meet a huge wave of orders from companies preparing to restart or scale up their operations.

Central banks have injected close to $100bn to prop up investment funds hit by the coronavirus-induced market turmoil.

Japanese prime minister Shinzo Abe is today expected to announce the extension of a nationwide state of emergency until the end of May.

India’s manufacturing activity contracted to a record low in April, as Asia’s third-largest economy reels from one of the world’s strictest lockdowns.

Tanzania’s government is covering up the true extent of the coronavirus pandemic with secret burials taking place at night, hospitals overflowing and three parliamentarians suspected of dying from the disease, according to doctors, opposition leaders and activists.

Markets await details on UK exit plan and Bank of England reports

A big week lies ahead for the UK.

On Thursday morning, the Bank of England is set to release its Monetary Policy Report and Interim Financial Stability Report.

The Monetary Policy Report will set out the economic analysis and inflation predictions used by the bank to make its interest rate decision. It is expected to contain detailed scenarios on the hit to the economy from the virus, similar to predictions set out by the European Central Bank last week.

Analysts at Jefferies said the ECB’s calculation of a drop of up to 12 per cent in eurozone GDP this year was “far too optimistic” and suggested the UK economy could contract by as much as 35 per cent in the second quarter.

The Financial Stability Report will outline the central bank’s take on the current stability of the UK financial system (and what it is doing to remove or reduce risks). Markets will be watching closely for what it says regarding the health of the banking sector and its ability to withstand a heavy blow from the pandemic.

This becomes all the more important, according to Jefferies, given that the eventual fallout from the virus is “impossible to quantify with any degree of precision”.

Later in the week, the prime minister is expected to provide details on how Britain will exit the current lockdown and get the country’s economy moving. Draft rules for UK workplaces suggest companies will be told to curtail hot desking, staff canteens will have to stay closed and lifts will be kept half-empty.

Spanish manufacturing activity plunges

Valentina Romei in London

Survey data released through the European morning will outline the pandemic’s impact on the region’s factories.

Spain is first to report, and manufacturing activity plunged to a near all-time low in April amid factory closures and slumping demand.

The IHS purchasing managers index for Spain fell to 30.8 in April, from 45.7 in March. The score is just shy of the all-time record low of 28.5, recorded in December 2008 during the financial crisis. A reading below 50 indicates the majority of businesses reporting a deterioration in activity compared to the previous month.

The output component of the index fell at the fastest rate since records began in 1998, while the PMI employment index fell to its lowest level in more than a decade.

Separate data released on Monday by the Spanish office for national statistics (INE) showed that in March the number of nights in non-hotel tourist accommodation, such as camping and self-catering accommodation, crashed 63 per cent compared to the same month last year. The figure points to a sharp contraction in revenues in 2020 from tourism, an important share of Spain’s GDP.

Corporate news round-up

The Financial Reporting Council launched an investigation last month into the audit undertaken by Ernst & Young of the financial statements of NMC Health, the UK accounting regulator announced on Monday. The decision comes after the hospital operator revealed in March that it had found evidence of suspected fraud in its accounts.

Spain’s Telefonica confirmed that it is in talks with John Malone’s Liberty Global to combine telecoms operator O2 with Virgin Media, which would create a stronger competitor to BT.

US and European banks are on track to book more than $50bn of charges on soured loans in the first quarter, the biggest such provisions since the 2008-09 financial crisis.

IG Group, Europe’s largest online trading platform, appointed Charlie Rozes, former finance director of Jardine Lloyd Thompson, as chief financial officer.

Pendragon, the UK’s second largest car dealer, confirmed that it held talks with rival Lookers regarding a possible merger but that those discussions had ceased.

Hotel Chocolat replaced its £10m overdraft facility with a £35m revolving credit facility, after reporting that the growth in online sales could not mitigate the loss in sales at retail stores over Easter.

Vaxxel, a French start-up that develops vaccines against respiratory viral infections, announced the acquisition of Transgene’s DuckCelt-T17 cell line which is used against influenza and an acute respiratory virus.

Germany’s Covid-19 outbreak shows further signs of easing

Guy Chazan

Germany reported 679 new coronavirus cases on Monday, a slight decline on the previous day’s tally, in a further indication that the spread of the pandemic is noticeably slowing in the country.

According to official data from the Robert Koch Institute in Berlin, the number of people who died of Covid-19 over the past 24 hours rose by 43 to 6,692. The total number of detected infections increased to 163,175, though about 132,700 of them have already made a full recovery.

European futures slide

European stocks were on course to tumble on Monday, as tensions between the US and China over the outbreak of Covid-19 rippled through markets.

Futures trade pointed to significant losses for continental Europe, with the Dax down 3.5 per cent in Frankfurt and Paris’s CAC 40 3.7 per cent lower. Many European markets had missed Friday’s sharp sell-off for a public holiday.

The FTSE 100, which fell nearly 2.5 per cent on Friday, was facing more modest losses of around 0.5 per cent at the open.

Analysts said that an upcoming decision in the German constitutional court on the legality of the ECB’s asset purchasing programme was also weighing on sentiment, as it could undermine the central bank’s Covid-19 response.

“The real event is the Bundesverfassung which could decide that the PSPP [asset purchasing programme] is illegal, sending the entire European periphery into a tailspin,” said Sebastien Galy, strategist at Nordea Asset Management.

Norwegian Air closes in on debt-for-equity swap

Richard Milne in Oslo

Norwegian Air Shuttle announced it was close to its goal of pushing through a large debt-for-equity swap that would help the embattled low-cost airline unlock a state rescue after a dramatic weekend of negotiations.

Minutes before an extraordinary shareholders meeting on Monday, Norwegian announced that it had reached agreement with enough aircraft leasing companies that it should be able to convert more than NKr10bn ($960m) in debt into equity, pushing its equity ratio significantly above the 8 per cent threshold imposed by Norway’s government for NKr3bn in loan guarantees.

Norwegian said on Monday morning it had received “strong support” from leasing companies to convert $730m into equity, up from $550m on Friday evening, and that it was continuing to discuss with other lessors.

Monday’s extraordinary meeting will ask existing shareholders to allow themselves to be all but wiped out by the debt-to-equity swap, before asking new shareholders to back a NKr400m rights issue, the fourth from Norwegian in two years. Norwegian said that it had received commitments from bondholders – who are set to become large shareholders under the plan – for a “meaningful amount”, leading it to declare that it expects investors to approve the rights issue.

Egyptians awaiting deportation from Kuwait launch protests

Simeon Kerr in Dubai

Kuwaiti security forces quelled violent protests by Egyptian expatriates awaiting deportation in a camp.

The interior ministry in a statement said officers had detained some of the protesters who caused a “riot and anarchy” as they called for the Egyptian embassy to repatriate them home.

Ahead of the provision of evacuation flights, the Gulf state has been isolating some “illegal” expatriates who have seen work opportunities collapse in the aftermath of coronavirus.

“The security services will not allow chaos or bypassing the law,” the ministry said in a report carried by the official news agency on Monday.

The report said Egyptian diplomats had attended the scene and assured those who had violated their residency status that they would start to be evacuated this week. The embassy previously said women and children would be prioritised with the first flight allocations.

Videos of the disturbances have been circulating on social media, showing the use of tear gas and protesters brandishing makeshift weapons from wood and bed posts.

India manufacturing activity shrinks to record low

Stephanie Findlay in New Delhi

India’s manufacturing activity contracted to a record low in April, as Asia’s third-largest economy reels from one of the world’s strictest lockdowns.

The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, fell to 27.4 in April from 51.8 in March — the sharpest contraction since data collection started 15 years ago. A PMI reading below 50 points to a contraction.

The plunge in demand resulted in a series of layoffs, with employment reduction also the steepest in the survey.

“Record contractions in output, new orders and employment pointed to a severe deterioration in demand conditions,” said Eliot Kerr, economist at IHS Markit. “Meanwhile, there was evidence of unprecedented supply-side disruption, with input delivery times lengthening to the greatest extent since data collection began in March 2005.”

India has extended its nationwide lockdown until May 17 to contain a surge in cases, with 427 people testing positive in New Delhi on Sunday, which represents the steepest jump in fresh cases in the capital. The country has now recorded a total death toll of more than 1,300 people.

“Looking ahead, with the shutdown now extended for another two weeks and with hopes of a quick post-virus recovery evaporating, local industry will remain on its knees for a long time,” said Darren Aw, Asia economist at Capital Economics, warning “the economy will almost certainly contract this year and the recovery will be hampered too”.

Greece outlines compulsory face-mask rules

Kerin Hope in Athens

Greece announced that wearing face-masks will be obligatory from Monday on public transport and at all medical facilities as the country begins to emerge from a five-week lockdown that appears to have curbed the spread of coronavirus.

“We’re entering uncharted waters this week: we will move one step at a time and continue to follow closely the advice of experts,” a government spokesman said.

Some retail outlets will re-open, among them bookshops, florists, stationers, electronics stores and opticians, while hairdressers and beauty salons will operate only through appointments and will have to record customers’ details, the civil protection agency said.

Opening hours for shops and services will be staggered so that social distancing can be enforced on public transport, it said.

Six new cases of Covid-19 were reported on Sunday, bringing the total to 2,626. One death was recorded, raising the number of fatalities to 144. Thirty-seven patients are being treated in intensive care units, compared with more than 70 two weeks ago, the public health authority said.

French quarantine rules will not apply to visitors from EU or UK

Victor Mallet in Paris

French rules that will require arrivals from abroad to be quarantined for 14 days after arrival because of the coronavirus pandemic will not apply to travellers from the EU, the Schengen zone (which includes Switzerland) or the UK, the Elysée palace said on Sunday night.

The statement clarified a declaration on Saturday about the new rules that would accompany a two-month extension of the country’s state of “health emergency” until July 24.

“All those entering French territory from the EU/Schengen zone and the UK will not be affected by the quarantine measure, whose details will be announced shortly,” the Elysée said.

France is planning to ease on May 11 a lockdown that will have lasted two months, although tight restrictions may remain in parts of the country if the virus continues to circulate actively and hospitals are still overloaded with intensive care patients. On Sunday, the official daily death toll fell to 135, the lowest level for six weeks.

Oil and Asia stocks drop as US-China tension flares again

Hudson Lockett in Hong Kong

Asian stocks were broadly lower as renewed US-China tension added to coronavirus concerns, while oil prices tumbled as traders fretted over rapidly filling global storage capacity.

Hong Kong’s benchmark Hang Seng index dropped 3.9 per cent on Monday, while South Korea’s Kospi index fell 1 per cent. Markets in Japan and mainland China were shut for holidays.

Oil benchmarks also got off to a poor start for the week, hit by persisting worries about oversupply and inadequate storage. West Texas Intermediate, the US marker, was down 4.8 per cent at $18.84 a barrel in Asia trading while Brent crude, the international benchmark, dipped 0.1 per cent to $26.41.

Futures markets tipped the S&P 500 to drop 0.9 per cent when trading begins on Wall Street later on Monday.

The latest declines for global equities came after Mike Pompeo, US secretary of state, on Sunday reiterated US government claims linking the coronavirus outbreak to a laboratory in Wuhan, China, without providing any evidence. China has denied that the virus came from the lab.

Trump promises ‘very conclusive’ report on how outbreak started

President Donald Trump said he thought China made “a horrible mistake” on the virus outbreak, that it did not want to admit it and had tried to cover it up as he promised the US would soon release a “very conclusive report” on what had happened.

His comments, broadcast in a Sunday night interview on Fox News, echoed comments made earlier in the day by US Secretary of State Mike Pompeo who said there was “enormous evidence” that the virus came from a Wuhan laboratory.

China has previously denied the claims that the virus was linked to the laboratory.

Mr Trump suggested “a case could be made” that Beijing deliberately allowed the virus to spread outside China, but declined to directly criticise President Xi Jinping.

Markets were broadly lower in Asia after the comments highlighted heightened tensions between the US and China.

Supply chain fears spark run on toilets in Japan

Kana Inagaki and Leo Lewis in Tokyo

The early weeks of the coronavirus outbreak triggered twin bouts of panic buying in Japan — of toilet paper and of the toilets themselves as building wholesalers competed to secure the precious commodity.

The rapid rise in demand for lavatories and an accompanying sudden nationwide shortage of them from mid-March was the result of market participants attempting to “game” the system ahead of rivals as Chinese factories closed and supply chains dried up.

The panic buying was prompted by a fear among housebuilders that they would be unable to declare any new property liveable without a secure supply of the vital equipment, said manufacturers.

Read more here.

Taiwan manufacturing sector slows in April as pandemic hits orders

Kathrin Hille in Taipei

Taiwan’s manufacturing sector slowed sharply in April, as the blow the coronavirus pandemic is dealing to the global economy is causing a drop-off in demand for its exports.

Two purchasing managers’ indices (PMI) published on Monday turned negative, reflecting record drops in output and new orders at manufacturing companies last month.

The IHS Markit Taiwan Manufacturing PMI dropped from 50.4 in March to 42.2 in April, its lowest level since May 2009 when the economy was reeling from the global financial crisis.

The PMI compiled by the Chunghua Institution for Economic Research (CIER), the Taiwan government’s macroeconomic think-tank, dropped from 53.1 in March to 47.6 in April, the fastest slide since the institute started the index in 2012.

A PMI reading below 50 points to a contraction.

The negative readings highlight the risks for Taiwan’s economy even though its successful containment of the pandemic has left its domestic economy less affected than those in countries with lockdowns. Gross domestic product expanded by 1.54 per cent compared with the same period last year, according to the government’s initial reading published last week.

“Output and new orders both fell at the quickest rates since the depths of the global financial crisis in January 2009, with many firms noting that lockdowns across key export markets in Europe and the US had weighed heavily on performance,” said Annabel Fiddes, Associate Director at IHS Markit.

“The virus, which has caused mass company closures and travel restrictions across a number of nations, also meant that supply chains came under greater pressure, with the latest survey pointing to the sharpest increase in delivery times since the survey began in 2004.”

According to the CIER PMI, only the chemical and pharmaceutical and electronics industries continued to grow last month. The transport machinery industry and power and tool machinery sectors showed the sharpest drop.

According to the institute’s service PMI, also published on Monday, the service sector remained in contraction.

New Zealand reports no new coronavirus for first time in 7 weeks

Jamie Smyth in Sydney

New Zealand reported no new cases of coronavirus for the first time in more than a month on Monday providing hope that the Pacific nation may be on course to eliminate the virus.

“Clearly these are encouraging figures today, but it is just one moment in time,” said Ashley Bloomfield, director general of New Zealand health.

“The real test is later this week when we factor an incubation period for the virus and the time it takes for people to display symptoms which is generally five to six days after exposure.”

New Zealand imposed one of the world’s toughest lockdowns in mid-March, shuttering most businesses as it sought to eliminate the virus rather than contain it.

The strict measures, high levels of compliance and remote location have reduced the number of new cases to a handful over the past week. The last time authorities reported no new cases of coronavirus was March 16.

Dr Bloomfield told reporters New Zealand has 1,487 cases of coronavirus with one probable case reclassified as confirmed following a positive test in the last few days. Ten further cases have recovered since Sunday, bringing the total to 1,276, which is 86 per cent of all confirmed and probable cases.

New Zealand authorities have urged caution despite the positive news, asking people to continue complying with social distancing restrictions.

Jacinda Ardern, New Zealand prime minister, has been invited to join Australia’s national cabinet meeting on Tuesday, where discussions will focus on efforts to establish a “trans-tasman” travel bubble and both nations’ development of mobile phone contact tracing app.

Thailand to permit repatriation flights

John Reed in Bangkok

Thailand, which began from May 1 to relax some of its strict lockdown measures, has given the green light for all of its international airports to begin handling repatriation flights.

The Civil Aviation Authority of Thailand’s order, announced on Sunday, comes after domestic flights resumed on Friday. It will pertain only to international flights flying foreign nationals home or the thousands of Thais who live overseas and have been seeking to return.

Thailand remains off limits to commercial passenger flights after the CAAT’s decision last week to extend a ban on them until end-May.

Foreign arrivals to the kingdom’s economically vital tourism industry dropped 76.4 per cent in March year on year, the Bank of Thailand said last week.

Trump says up to 100,000 could die of coronavirus in US

Aime Williams in Washington

US president Donald Trump has said up to 100,000 people could die from coronavirus in the US, an upward revision of his previous forecasts.

In a Fox News “town hall” meeting on Sunday evening at the Lincoln memorial in Washington, Mr Trump said the death toll was a “horrible thing”.

But he added he believed it was possible to relax some of the strictest restrictions. “I really believe that you can go to parks, you can go to beaches,” said Mr Trump, adding the social distancing recommendations should still be followed in those places.

Japan set to announce extension of state of emergency

Robin Harding in Tokyo

Japanese prime minister Shinzo Abe is today expected to announce the extension of a nationwide state of emergency until the end of May as the country struggles to bring down the number of coronavirus cases.

The government’s council of expert advisors met at 8.30am with the prime minister expected to give a press conference this evening. An existing declaration was due to expire on May 6th.

Under the state of emergency, Japan has engaged in voluntary social distancing, with schools and many shops closed but a number of restaurants still open. The government has urged the public to achieve an 80 per cent reduction in person-to-person contacts.

During the extension, the rules will remain largely the same in 13 “special alert” prefectures including Tokyo and its suburbs, although parks, museums and libraries will be allowed to open if they meet hygiene rules.

In Japan’s remaining prefectures, the rules will be more relaxed, including the possibility of reopening schools.

South Korean factory gauge drops as shutdowns hit production

Edward White in Wellington

South Korean manufacturing volumes fell at their fastest pace in more than 10 years in April, as the coronavirus outbreak forced factory shutdowns domestically and abroad and battered global demand.

The Nikkei-Markit manufacturing purchasing managers’ index fell to 41.6 from 44.2 in Asia’s fourth-largest economy, declining further from the 50-point marker separating contraction from expansion. The April reading was the lowest point seen since the global financial crisis.

IHS Markit, which conducts the PMI survey, noted supply chain dislocations saw delivery times lengthen to their longest in almost 16 years.

“Although China, South Korea’s biggest export market, appears to be slowly re-opening for business, it’s clear this will be far from sufficient to offset the severe weakness elsewhere. It’s certainly going to be a challenge for South Korean policymakers to prop up an economy that’s so reliant on global trade,” said Joe Hayes, an economist at IHS Markit.

The data comes despite South Korea winning international praise for suppressing the coronavirus outbreak. Last week Seoul reported its first day of no new local transmissions for the first time since February and this week will further ease social distancing measures.

The government has already announced virus related spending of almost $200bn as it attempts to shore up battered industries and financial markets as well as protect jobs.

China reports 3 new coronavirus cases

Health authorities in China reported three new coronavirus cases to the end of Sunday, with all of the new infections found in people who had returned from overseas.

Two of the infections were found in people returning to Shanghai, while one was discovered in Shandong.

Those new cases bring the total in mainland China to 82,880.

There were no new deaths linked to Covid-19, meaning the number of reported deaths remains at 4,633.

China reported 13 cases of people who tested positive for coronavirus but showed no symptoms. A Financial Times analysis found that 60 per cent of confirmed cases recorded in April were non-symptomatic at time of testing.

News you might have missed

Brazil’s total number of confirmed coronavirus cases rose above 100,000 on Sunday as President Jair Bolsonaro drew supporters defying social isolation measures.

Greece’s economy will shrink this year by between 4.7 per cent and 8.9 per cent depending on the impact of the coronavirus pandemic, according to a new projection from the finance ministry.

French rules that will require arrivals from abroad to be quarantined for 14 days after arrival will not apply to travellers from the EU, the Schengen zone (which includes Switzerland) or the UK, the Elysée palace said on Sunday night.

The formation of a new Irish government advanced a step on Sunday as the opposition Greens decided to enter formal coalition talks with prime minister Leo Varadkar and the opposition Fianna Fáil party. Mr Varadkar has led a caretaker government since talks following an inconclusive February 8 election were disrupted by the coronavirus pandemic.

New York and its six neighboring states in the northeast of the US are forming a buying consortium to secure billions of dollars worth of coronavirus medical and testing equipment as they prepare to reopen their economies.

Mexico’s consumer ombudsman, who attends President Andrés Manuel López Obrador’s daily news conference every Monday, said he had tested positive for coronavirus.

Low-cost airline Norwegian Air Shuttle has reached a last-minute deal with bondholders for a debt-for-equity swap, bringing it one step closer to securing a government rescue package needed to avert financial collapse.

A second round of rescue funding to small US businesses has awarded more than half of its total funding in days as the government seeks to assist the “smallest of small businesses”.

Senior figures in the City of London have urged the government to proceed with caution in easing the lockdown, saying there should be a gradual reopening of the economy.

Asia-Pacific stocks slip as coronavirus sparks US-China tensions

Asia-Pacific stocks slipped and US stock futures fell at the start of the week as the coronavirus pandemic reignited US-China tensions.

The Kospi in South Korea fell 2.4 per cent and Australia’s S&P/ASX 200 was down 0.5 per cent. S&P 500 futures pointed to a 1.5 per cent fall when US markets open later on Monday.

Japanese and Chinese markets are closed for public holidays.

Mike Pompeo, US secretary of state, on Sunday repeated US government claims linking the coronavirus outbreak to a laboratory in Wuhan, China, without giving evidence. In a television interview, Mr Pompeo said China was blocking access to information and refusing to co-operate with overseas scientists.

On Friday, the S&P 500 ended 2.8 per cent lower as investors assessed the potential hit from the coronavirus to companies after Amazon warned of higher costs to protect workers.

Westpac to defer dividend after 62% plunge in net profit

Jamie Smyth in Sydney

Westpac will defer paying a dividend following a year-on-year 62 per cent slump in net profit, caused by loan losses linked to the coronavirus crisis and the fall out from a money laundering scandal, the bank said on Monday.

Australia’s second-biggest lender by assets reported profit of A$1.19bn ($759m) in the six months to the end of March with A$1.6bn in Covid-19 related impairment charges and a A$900m provision for expected penalties linked to the money laundering scandal denting its performance.

Westpac’s wealth platforms, pensions and life insurance businesses will be amalgamated into a single unit in preparation for a potential sale to a new owner, according to the company.

“This is the most difficult result Westpac has seen in many years. It is significantly impacted by higher impairment charges due to Covid-19, as well as notable items including the Austrac (money laundering) provision,” said Peter King, Westpac chief executive.

“We are well capitalised and our liquidity and funding metrics are comfortably above regulatory requirements.”

Westpac reported tier one capital, a measure of balance sheet strength, of 10.8 per cent, which is down from 11.25 per cent reported following the bank’s A$2.77bn capital raising in November. Prior to raising that capital Westpac reported tier one capital at 10.67 per cent.

US reports 1,158 more deaths as total nears 62,000

Peter Wells in New York

The number of coronavirus deaths in the US over the past day rose by the least in a week and took the total number of fatalities since the pandemic began to near 62,000.

A further 1,158 people died over the past 24 hours, according to data compiled by Covid Tracking Project on Sunday, the smallest daily increase since April 26.

New York had a further 280 deaths, the smallest daily increase since March 30. Since the outbreak began, 19,189 people have died in the US’s hardest-hit state.

New Jersey, the second-hardest hit state, had 129 deaths over the past 24 hours, the smallest daily increase since April 27. A cumulative total of 7,871 people have died.

Nationally, 61,868 people have died in the US over the duration of the outbreak.

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