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* FTSE down as much as 8.8%, biggest drop since 2008
* PM Johnson to chair emergency meeting
* Tesco restricts bulk buying of some products
* EasyJet, BA set to reduce northern Italy flights
(Adds details on airlines)
By Andy Bruce and Sarah Young
LONDON, March 9 (Reuters) - British stocks had the biggest
intraday fall since 2008 and benchmark bond yields turned
negative for the first time on Monday on investor fears that the
coronavirus outbreak could stall the global economy.
As the worries about the coronavirus outbreak hammered
markets, Prime Minister Boris Johnson was preparing to chair an
emergency meeting at which more stringent measures to tackle the
outbreak will be considered.
The FTSE 100 plunged to a three-year low after Saudi
Arabia crashed the oil prices by slashing its own selling prices
and raising output.
Yields on benchmark British government bonds turned negative
for the first time ever as panicked investors rushed to the
safety of gilts to hedge against the feared economic shock of
the coronavirus.
The 2-year gilt yield last stood at -0.032%, down
12.6 basis points on the day. The commodity-heavy FTSE 100 gave
up as much as 8.8%, while the domestically focused mid-cap index
shed 6.1%.
Britain has so far reported three deaths and 278 cases of
the new coronavirus. The country's biggest retailer, Tesco, has
restricted bulk buying of products such as anti-bacterial gels
and wipes, dried pasta and long-life milk.
"The number of coronavirus cases continues to rise in the UK
and around the world," Johnson said. "We are well prepared and
will continue to make decisions to protect the public based on
the latest scientific advice."
The new coronavirus, which emerged in China in December,
causes a disease called COVID-19. It has spread around the
world, infecting more than 106,000 people and 3,600 people have
died worldwide, according to a Reuters tally.
GOVERNMENT RESPONSE
Britain's emergency scientific group agreed last week that
the virus was likely to spread in a significant way and the
government will decide on Monday whether to move to the so
called "delay phase" of its plan.
As some British supermarket shelves were emptied of basics
such as lavatory paper, the British government said it had set
up a team to tackle "interference and disinformation" around the
spread of coronavirus.
The government will hold a conference call with supermarkets
on Monday to discuss their response to the virus.
"We are in regular contact with the food industry to ensure
it is well prepared to deal with a range of scenarios," the
government said.
Britain's finance minister is due to deliver his annual
budget speech on Wednesday and investors awaiting any indication
of additional stimulus from the Bank of England and the
government.
British culture secretary Oliver Dowden said there were no
plans to shut museums, art galleries or concert halls, or to
order sporting events to be cancelled or played behind closed
doors.
UK-based airlines easyJet and British Airways
are expected to reduce their flights to northern Italy
over the next three and a half weeks after Italian authorities
ordered a virtual lockdown of the area.
(Writing by Guy Faulconbridge; editing by Michael Holden/Keith
Weir)
