It was the second profit warning in a month after the maker of wine brands such as Penfolds Grange and Wolf Blass had blamed a poorly performing US market for an unexpected downgrade in January. The US shock smashed the share price far worse than its coronavirus warning this week, and the winemaker brought forward the retirement of chief executive Michael Clarke almost two weeks before the virus downgrade. Not that any impact of the spreading illness on its Chinese market should be underestimated. "Their Asian operations are particularly material to the group and have been their key area of growth in recent years," says Morgans analyst Belinda Moore. Loading Replay Replay video Play video Play video

Virgin Australia was another high-profile victim this week. The airline announced it will slash budget arm Tigerair and make steep cuts across its entire network as the virus outbreak prompts it to step up efforts to cut costs to fend off a potential $75 million hit in the current half year. Loading But the airline's virus-free December half already ended in a $88.6 million loss due to redundancies, fleet simplification and write-downs. And Virgin chief executive Paul Scurrah hinted that the virus threat may serve as yet another opportunity to reset its cost base. “For many years revenue has not been our problem – it’s costs, so we will continue to attack our cost base," Scurrah said after the half-year results this week.

On the retail front, Mosaic Brands, the suburban fashion empire formerly known as Noni B, has been smashed all week after blaming the coronavirus for a potential supply chain crunch that will threaten the delivery of its winter season fashion and trigger a cardigan shortage. Mosaic sources 85 per cent of its products from China and said it was already experiencing delivery and manufacturing delays due to virus fears. Yet rewind to January, and the stock took a major hit as the retailer issued a profit warning due to bushfire impact. Taste of things to come The examples suggest the profit warnings to date may just be a taste of what is to come as companies try to assess the likely impact of what is now looking like a global contagion.

"The issue is becoming more serious than was initially envisioned by most market participants," Ophir Asset Management's senior portfolio manager Andrew Mitchell told The Sydney Morning Herald and The Age. He says the direct impacts are "very roughly known", hitting travel companies like Webjet, Corporate Travel, Flight Centre, Sealink and retailers like Lovisa, but secondary impacts are yet to be fully determined. "Much is unknown about the extent of transmission of the virus outside China now and supply and demand impacts on businesses more generally," he warned. ANZ offered somewhat of an indicator on Friday with data showing the value of electronic transactions processed through ANZ Bank terminals at Sydney, Melbourne, Brisbane and Perth’s airports was about 30 per cent lower for the week ending February 24 than it was at the start of December. The virus is already impacting spending within our international and regional airports, according to ANZ. Credit:Peter Braig

“This is much lower than the seasonal change in previous years, where ANZ observed spending in major airports was 5 to 15 per cent lower in late February compared with early December,” says ANZ Bank economist Adelaide Timbrell. While the early decline was interpreted as a reflection of reduced arrivals and departures for international travellers, Timbrell says ANZ-processed spending in small and mid-sized airports – with a higher share of domestic travel – fell in late February. “This indicates that locals may be taking fewer domestic flights and that the drop in international tourist numbers is flowing through to domestic travel,” she says. Viral shock According to AMP Capital's chief economist Shane Oliver, the money manager's base scenario is still for the virus to be contained in the relatively near future, but he warns the hit to economic activity is deepening and the risk of it becoming a full-blown pandemic is rising.

"Our rough estimate is that the March quarter global GDP could now be zero or slightly negative," he says. The global spread of the virus and the resulting increased risk of economic disruption could trigger a 20 per cent fall in sharemarkets, according to Oliver. Loading And no country will be as badly impacted by the reverberations from China than Australia, which relies on the economic giant for 9 per cent of its GDP, Oliver says. Other major countries rely on China for less than 3 per cent of their economic output. The corporate regulator on Friday highlighted another concern – what the viral shock might reveal about the health of the financial markets. "In my own experience you find that when there is market dislocations then you often find issues that have been bubbling away under the surface that are only revealed in the times of market dislocation or market downturns," Australian Securities and Investments Commission chairman James Shipton told a parliamentary hearing on Friday.

The Australian Prudential Regulation Authority (APRA) said it had contacted the banks, pension funds and insurers that it oversees to make sure they had adequate plans in place.