MONEY LIVE | Global markets collapse amid resurgence of virus fears
Global markets collapse amid resurgence of virus fears
Global stocks and oil prices fell on Monday as the spread of the Delta variant of Covid-19 fueled fears of a faltering economic recovery, while the OPEC + alliance agreed to increase production.
Safe-haven assets such as US Treasury bonds were the order of the day amid the widespread sell-off of risky investments.
Oil prices plunged after OPEC + on Sunday agreed to pump an additional 400,000 barrels per day each month from August to meet growing demand as economies reopen. London stocks fell 2.3% at the close after the UK government lifted the daily brakes on the pandemic in England despite soaring infection rates.
In euro area trade, Frankfurt fell 2.6% and Paris 2.5%. In New York, the Dow Jones plunged 2.1% in its worst session of 2021.
Europe reflected large losses in Asia as investors shed risky investments and feared soaring inflation could trigger central bank interest rate hikes.
“Risk aversion is firmly in place as the spread of the Delta Covid variant triggers a flight to safety,” said Edward Moya, analyst at Oanda brokerage.
“Global investors are increasingly anxious and are selling stocks, commodities and even cryptocurrencies to buy US Treasuries,” he added.
Meanwhile, in England almost all restrictions on Covid-19 have been lifted, a move criticized by many health experts but hailed by media and supporters as a ‘freedom day’.
“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 the further easing of restrictions are likely behind the drop.”
The Delta variant has been in the headlines for weeks, but concerns on Wall Street have grown after Los Angeles reimposed an indoor mask warrant over the weekend following a steady rise in infections and of hospitalizations with Covid-19. While the losses were fairly widespread, travel stocks were a particularly weak area for stocks. Carnival and United Airlines both fell more than 5%, while Marriott International lost 3.1% and Expedia fell 3.8%.
Monday’s rout reflects the “cumulative effect” of recent headlines, said Art Hogan, chief strategist at National Securities.
“The market is focused on coronavirus restrictions and what it means for economic activity. There is very strong muscle memory on what it means.”
Key figures around 2050 GMT
New York – Dow: DOWN 2.1% to 33,962.04 (close)
New York – S&P 500: DOWN 1.6% to 4,258.49 (close)
New York – Nasdaq: DOWN 1.1% to 14,274.98 (close)
London – FTSE 100: DOWN 2.3% to 6,844.39 (close)
Frankfurt – DAX 30: DOWN 2.6% to 15,133.20 (closing)
Paris – CAC 40: DOWN 2.5% to 6,295.97 (closing)
EURO STOXX 50: DOWN 2.7% to 3,928.53 (closing)
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)
North Sea Brent: DROP 6.8% to $ 68.62 per barrel
West Texas Intermediate: 7.5% DROP to $ 66.42 per barrel
Euro / dollar: LOWER to $ 1.1804 from $ 1.1806 at 9:00 p.m. GMT on Friday
Pound / dollar: DOWN to $ 1.3675 from $ 1.3767
Euro / pound: up to 86.29 from 85.76 pence
Dollar / yen: LOWER to 109.46 against 110.07 yen