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.
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"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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