LONDON, July 14 — World stock markets fell today as fears resurfaced over a spike in coronavirus infections around the world, dealers said, but London losses were limited despite grim UK economic output data, dealers said.
In Europe, Frankfurt stocks dived 1.5 per cent and Paris shed 1.8 per cent, with sentiment hit by the reimposition of some containment measures in parts of the United States, Australia and Hong Kong.
London traded only a shade lower as the British pound slid on official data showing that the virus-plagued UK economy shrank by almost a fifth in the three months to April.
A weaker British currency tends to boost share prices of companies listed in London who earn vast sums in dollars.
World oil prices meanwhile fell further on growing speculation that top crude producing nations will agree to tapering their output cuts at an expanded Opec+ meeting this week.
In Asia, Hong Kong fell more than one per cent, Shanghai dropped 0.8 per cent and Tokyo lost 0.9 per cent, after a Wall Street rally fizzled yesterday on more Covid-19 troubles in the United States.
“A late sell-off on Wall Street spilled over into Asia and is dragging on European stocks,” said City Index analyst Fiona Cincotta.
“Sentiment soured on Wall Street after the state of California imposed new restrictions on business as coronavirus cases spiral out of control and hospitalisations soar.
“The shutdown fuels fears that the growing number of coronavirus cases will hamper the fragile economic recovery.
The tech-rich Nasdaq Composite Index, which has surged to repeat records in recent weeks, tumbled 2.1 per cent following the announcement California was imposing fresh restrictions to address the coronavirus.
California, the richest of the US states, ordered all indoor restaurants, bars and movie theatres to re-close, while churches, gyms, shopping malls, hair salons and non-essential offices have been told to shut up shop in several densely populated counties, including Los Angeles.
The measures follow new restrictions imposed in Texas, Arizona, Florida and other major states.
Meanwhile, Hong Kong yesterday announced sweeping new measures as the city suffers a relapse. Melbourne is already under a new lockdown and there are signs of new outbreaks in Sydney.
After hitting lows in March, markets have been surging thanks to government support and optimism that the world economy will bounce back as crippling lockdowns are eased.
But a worrying increase in new virus cases across the planet has forced governments to revert to measures aimed at preventing the disease’s spread.
News that Singapore’s economy, considered a regional barometer in Asia, contracted a mind-boggling 41 per cent in the second quarter also provided a stark reality-check for traders on Tuesday.
Singapore was 0.2 per cent down after figures showed the city-state’s trade-dependent economy plunged into recession for the first time in a decade as it contracted a record 41.2 per cent on-quarter in April-June and 12.6 per cent on-year.
The worse-than-expected figures will ring alarm bells for Asia’s many trade-dependent economies as Singapore is typically hit first before ripples spread across the region.
Key figures around 1100 GMT
London — FTSE 100: DOWN 0.2 per cent at 6,162.53
Frankfurt — DAX 30: DOWN 1.5 per cent at 12,607.11
Paris — CAC 40: DOWN 1.8 per cent at 4,964.32
EURO STOXX 50: DOWN 1.7 per cent at 3,293.51
Tokyo — Nikkei 225: DOWN 0.9 per cent at 22,587.01 (close)
Hong Kong — Hang Seng: DOWN 1.1 per cent at 25,477.89 (close)
Shanghai — Composite: DOWN 0.8 per cent at 3,414.62 (close)
New York — Dow: UP less than 0.1 per cent at 26,085.80 (close)
West Texas Intermediate: DOWN 0.9 per cent at US$39.74 per barrel
Brent North Sea crude: DOWN 0.7 per cent at US$42.43
Euro/dollar: UP at US$1.1350 from US$1.1344 at 2100 GMT
Dollar/yen: UP at 107.32 yen from 107.29 yen
Pound/dollar: DOWN at US$1.2524 from US$1.2556
Euro/pound: UP at 90.63 pence from 90.35 pence — AFP
