European and Asian stocks declined as growing concerns about Covid-19 outbreaks obscured the outlook for the global economy.
In trading on Monday morning, the European index Stoxx 600 fell by 1.4%. London’s FTSE 100 has fallen 1.3% because England has lifted most of its coronavirus restrictions. The optimism for the reopening was shaded by more than half a million people, including Prime Minister Boris Johnson, has been said to be isolated after coming into contact with infected individuals. Companies including supermarkets and ports have reported staff shortages.
Japan’s Topix fell 1.3%, while Hong Kong’s Hang Seng fell 1.7%.
After the stocks listed in the United States ended Friday with theirs the weekly performance paycheck in more than a month, futures markets have signaled that the S&P 500 blue-chip index will fall 0.5 percent in early exchanges.
The stakes are skyrocketing as investors struggle with the rapid spread of the highly transmissible Delta variant of Covid-19, which has hit countries that had previously brought the virus under control. The movements coincide with uncertainty on the path of monetary support from central banks after inflation rose in the United States and the United Kingdom.
Michael Hood, global multi-active strategist at JPMorgan Asset Management, said the rapid spread of the Delta variant was “mandatory for investors to refocus on the virus at a time when most had been happy to leave that problem “.
New York State on Saturday recorded more than 1,000 cases in a day for the first time since mid-May, while authorities in countries including Australia and Vietnam were battling growing infections, Singapore said. social distance restrictions and the Tokyo Olympics were find yourself from a coronavirus outbreak.
Stoxx and the U.S. S&P 500 were registered earlier this month on the brink of exuberance over coronavirus vaccines and companies reaping the benefits of the reopening economy.
“Valuations and sentiment have reached extreme growth levels,” said Ewout van Schaick, head of multi-asset investment at NN Investment Partners. “Now of course the resurgence of the virus makes uncertainty about economic progress in the coming months.”
Markets are also struggling with how monetary policy makers deal with rising inflation following rising US and UK consumer prices accelerated unexpectedly of June. The US Federal Reserve is under pressure to sharpen its $ 120 billion monthly bond purchases which have boosted markets throughout the pandemic in response to inflation trends while some British lawmakers are pushing the Bank of England to reinforce its own government debt acquisition.
The yield on the 10-year U.S. Treasury bond, which moves inversely to its price, fell 0.02 percentage points to 1.275 percent when traders bought the paradise asset.
The dollar index, which measures the green dollar against major currencies, gained 0.3 percent. The euro lost 0.2 percent against the dollar at $ 1.1781.
Brent crude, the international benchmark for oil, fell 1.5 percent to $ 72.47 a barrel. The move came later Opec and its allies reach out to a goddessl increase oil production to counter rising prices, announcing a plan to reverse all production cuts made during the pandemic by the end of 2022.
Brent had risen to a three years old more than $ 74 a barrel as demand rebounded this year, and I wasn’t sure if the Opec + cuts will be enough to offset upward pressure on prices that demand is expected to grow as well. more in the coming months.