Markets traded cautiously overnight as authorities in China sought to contain the coronavirus outbreak by restricting travel to and from Wuhan. European shares fell, crude oil slumped and bonds rallied as investors considered the potential for an epidemic to weigh on global growth. In other developments, the British pound jumped on a surprisingly strong read of business optimism, and US corporate reporting delivered mainly positive results.

All public transport to, from and within the central Chinese city of Wuhan, is now suspended. Authorities have urged citizens to avoid travelling unless they have “special reasons”. While the rapid and sweeping response is welcomed, the longer incubation period of the virus means escalation risks are higher. Another point of concern is that more than 3 billion journeys within China are planned for the coming New Year celebrations.

Futures markets indicate opening losses for Asia Pacific stocks.

Sterling jumped more than a US cent on a release from the Confederation of British Industry. Its gauge of business confidence leapt to 23 in January from December’s -44, defying forecasts of a read near -22. However the stronger currency weighed on UK shares.

Overnight US company report continued the early trend of beating sales and earnings estimates. Another emerging issue is the shrinking earnings in technology stocks, one of the key drivers of the decade long rally in US indices. Consumer goods group Johnson and Johnson’s fourth quarter was slightly ahead of forecasts, supporting confidence around consumer activity.