Equities tumbled across markets around the world on Tuesday on downbeat investor sentiment coming from the scare that a jump in coronavirus cases would impede the world’s economy.
In Asia, Japan’s Nikkei 225 index dropped 1 per cent to its six-month low, the same rate as its Hong Kong peer, Hang Seng.
U.S. Dow Jones Industrial Average and UK’S FTSE 100 Index had the day before lost 2 per cent.
However, European stocks began Tuesday on a bright note, with the FTSE 100 trading up 1 per cent, just as the rest of principal European indexes recorded advances also.
Investors were faced with scare as the coronavirus renewed its strength in a couple of countries on the back of the sweep of the new Delta variant, forcing shares down on Monday.
Equities in Japan, Asia’s second largest economy, have seen five slides in a trot on worries about the advance of the variant made worse by the prospects of this year’s Olympics to be hosted in Tokyo could compound the crisis.
“Investors are concerned that the rapid spread of the Delta variant will derail the trajectory of the global recovery, notably in Asia which still has relatively low vaccination rates and where some widely used vaccines do not appear overly effective against it,” Jeff Halley, senior market analyst at broker Oanda told the BBC.
“I believe we are in for a messy week ahead, with markets being driven around by sentiment and not data, as the international economic calendar is very quiet.”
In the UK, businesses are scaling back opening hours and suspending shop operations, and it is probable they could be made to curb production, with workers compelled to self-isolate in the wake of an alert by the NHS Covid-19 app.
Susannah Streeter, markets analyst at Hargreaves Lansdown, said on Monday, “optimism which had been on the horizon just a few weeks ago has again been obscured by dark clouds, especially with the snap decision to enforce a 10-day quarantine for arrivals from France.”
“With some scientists warning that infections could reach 200,000 a day by September, there is now a feeling that the UK could be staring at a fresh autumn lockdown,” she added.
U.S. Joe Biden told Americans at a press conference to take vaccination to keep the economy open.
Fears are still palpable among American investors after Los Angeles announced an indoor mask order again in the weekend as coronavirus cases of the Delta variant climb further.
The Dow Jones Industrial Average’s fall of 2.1 per cent on Monday marked the index’s worst moment since the year turned.
“That’s not how I judge economic growth,” Biden said of how markets fared on Monday.