Global markets collapse amid resurgence of virus fears
The spread of the Delta virus variant has fueled fears that it will undermine the economic recovery.
Wall Street sign near the New York Stock Exchange building in New York City. Photo: AFP.
LONDON – Global stocks fell on Monday as the spread of the Delta virus variant fueled fears it could jeopardize the economic recovery, while oil prices fell after major producers finally agreed to increase their production.
Oil prices plunged after the OPEC + alliance agreed on Sunday to pump an additional 400,000 barrels per day per month from August to meet growing demand as economies reopen.
London stocks fell 2.6% in afternoon trading after the UK government lifted the daily pandemic restrictions in England despite soaring infection rates.
In eurozone trade, Frankfurt fell 2.9% and Paris fell 3.0%, and New York’s Dow Jones index fell 2.1% in morning trading.
Europe reflected large losses in Asia as investors shed risky investments and feared soaring inflation could trigger interest rate hikes.
“COVID FALLS CONFIDENCE”
“Risk aversion remained the dominant theme,” notes Fawad Razaqzada, analyst at ThinkMarkets.
“The selloff was pretty sharp for stocks, but it’s hard to say if this is just a retracement before other gains at a later point in time or if this is the start of something. really major, ”he added.
Meanwhile, in England almost all restrictions related to COVID-19 were lifted on Monday, a move criticized by many health experts – but hailed by media and supporters as a ‘day of freedom’.
“Far from providing an extra dose of investor confidence, ‘Freedom Day’ appears to be a setback,” Susannah Streeter, analyst at Hargreaves Lansdown, told AFP.
“The sharp rise in COVID infection rates in the UK and concerns about further easing of restrictions are likely behind the drop.”
KEY IN WORK
In Asia, Hong Kong has been the worst affected market after the United States warned companies of the “growing risks” of operating in the city as China tightens its grip, raising concerns over its future as a financial hub.
With vaccine rollouts around the world and some governments easing lockdowns, stocks enjoyed a healthy first half of 2021, with many markets hitting multi-year records or highs as traders bet on a strong rebound from the pandemic.
But the spread of the highly transmissible Delta variant has thrown a wrench in work as leaders in several countries – especially those with slow inoculation programs – reimpose lockdowns and other containment measures.
At the same time, soaring inflation has rekindled speculation that the Federal Reserve and other central banks may be forced to ease their ultra-accommodative monetary policies and raise interest rates earlier than expected. .
KEY FIGURES AROUND 1450 GMT
London – FTSE 100: DOWN 2.6% to 6,825.65 points
Frankfurt – DAX 30: DOWN 2.9% to 15,082.96
Paris – CAC 40: DOWN 3.0% to 6,266.48
EURO STOXX 50: DOWN 3.0% to 3,913.87
New York – Dow: DOWN 2.1% to 33,975.22
Brent North Sea: DOWN 5.7% to $ 69.37 per barrel
West Texas Intermediate: DROP 6.5% to $ 67.16 per barrel
Tokyo – Nikkei 225: DOWN 1.3% to 27,652.74 (close)
Hong Kong – Hang Seng Index: DOWN 1.8% to 27,489.78 (closing)
Shanghai – Composite: APARTMENT at 3,539.12 (closing)
Euro / dollar: Up to $ 1.1808 from $ 1.1806 at 9:00 p.m. GMT on Friday
Pound / dollar: DOWN to $ 1.3669 from $ 1.3767
Euro / pound: up to 86.38 from 85.76 pence
Dollar / yen: LOWER to 109.41 against 110.07 yen