Global Equity Sales Worsen Amid Delta Variation Fears

The threat of the Delta variant of Covid-19 hit Asian markets on Tuesday, after U.S. and European stocks fell sharply amid fears that new outbreaks of the virus could affect global growth.

The sell-off of the shares ended a multi-month streak of gains for international markets as the rapid spread of the Delta strain, a highly infectious mutation of the virus that has swept the world in recent weeks, has wreaked havoc on shrinking economies. regularly straightened up on the back foot.

Japan’s benchmark Topix index fell 1.1% while Australia’s S & P / ASX 200 and South Korea’s Kospi both fell 0.4%. Hong Kong’s Hang Seng index remained stable, while China’s CSI 300 index of stocks listed in Shanghai and Shenzhen rose 0.3%.

Overnight, Wall Street’s S&P 500 Index closed 1.6% lower and the technology-focused Nasdaq Composite fell 1.1%. London’s FTSE 100 fell 2.3%, as did the Stoxx Europe 600.

Futures for the S&P 500 and FTSE 100 rose 0.5% in Asian trading on Tuesday.

“Investors fear that a new epidemic could potentially hamper the pace of economic reopening,” said Tai Hui, chief Asian markets strategist at JPMorgan Asset Management. “The next one to two months will be an important litmus test of governments’ strategy to normalize lives and economic activities amid the threat of the pandemic. “

In the forex markets, the pound remained stable at $ 1.3679 after falling 0.7% in the previous session to its lowest level since early February.

Britain’s currency has been hit by a sudden resurgence of Covid-19 outbreaks just as the government removed the latest of its restrictions to contain the virus. The US Centers for Disease Control placed the UK on its highest level of Covid travel warnings on Monday, urging Americans not to surrender as England celebrated ‘Freedom Day’ .

In bond markets, the 10-year U.S. Treasury yield stabilized at around 1.2%, a hair above its six-month low as investors continued to seek the safety of government debt . Yields fall as bond prices rise.

Oil prices have risen after initially falling on Monday following the decision by OPEC + countries to increase production by 400,000 barrels per day each month until next year.

Brent crude, the international benchmark, rose 0.4% to $ 68.91 per barrel on Tuesday, while US marker West Texas Intermediate rose 0.5% to $ 66.91.