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October 22 2021 8:13 PM ˚

European and US equities held back by fresh virus woes

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A man walks past an electronic quotation board displaying a share price of the Tokyo Stock Exchange in Tokyo on August 16, 2021. Despite some cracks in US market gains, Asian markets largely continued business as usual on Wednesday. (Photo:Agence France-Presse)
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LONDON — European and US stock markets wobbled on Wednesday despite bumper Asian gains as a surge of the coronavirus Delta variant fanned fresh fears about the global economic recovery.اضافة اعلان

"The source of uncertainty is almost entirely due to the resilience of COVID and virus-related restrictions which have negatively impacted the global economy recovery," noted ThinkMarkets analyst Fawad Razaqzada.

"Global stock markets have been struggling across the world in recent days, although the selling has been limited for the European and US indices thus far."

In European trading, London and Paris shares ended lower, while Frankfurt managed a gain.

Wall Street opened lower, but both the S&P 500 and Nasdaq Composite briefly turned positive during morning trading.

"This market at the moment isn't stuck so much between a rock and a hard place as it is likely stuck in the summer doldrums, waiting for some new winds to blow," said analyst Patrick O'Hare at Briefing.com.

"For now, it's stuck in the thick of a hot air mass that includes the same old focal points: Delta variant concerns, infrastructure bill uncertainty, taper timeline guessing, peak growth, and peak earnings."

O'Hare was referring to a huge US infrastructure bill being debated in Congress and concerns about when the Federal Reserve will taper, or wind down, its massive asset-buying program. 

Asian indices, meanwhile, rallied on Wednesday as investors went fishing for bargain shares despite a fresh lockdown in New Zealand and a curfew imposed in Australia's second-largest city of Melbourne over a Delta outbreak.

That fueled fresh virus concerns along with travel restrictions in China, the world's second-largest economy.

A lackluster US retail sales report on Tuesday also exacerbated worries about the latest COVID-19 wave, bringing Wall Street's streak of five straight records for the Dow and S&P 500 indices to a stuttering halt.

But Asian markets appeared unmoved by gloomy prospects, with Tokyo snapping a four-day losing streak to close higher Wednesday.

Hong Kong also closed on a high, with investors seemingly broadly unfazed by new antitrust plans from Beijing designed to rein in China's burgeoning tech giants — plans that saw Chinese firms listed on Wall Street slide overnight.

The dollar traded mixed before publication of minutes from the US Federal Reserve's most recent monetary policy gathering.

Oil prices gave up most of their gains after US data showed a drop in crude stocks but an increase in those of gasoline, a possible indication that Americans are cutting back on vacation travel due to the surge in Delta variant cases.

"Brent crude prices have spent the last couple of days chopping aimlessly around, caught in a no man’s land of indecision between increase in supply, against the headwind of demand concerns as rising delta cases prompt disproportionate clampdowns by governments," said Michael Hewson, chief market analyst at CMC Markets UK.

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