European stocks steady after Delta fuels global rout

Australia's second largest city Melbourne entered a fresh lockdown owing to a resurgence in coronavirus cases

Australia's second largest city Melbourne entered a fresh lockdown owing to a resurgence in coronavirus cases

AFP/File | ASANKA BRENDON RATNAYAKE

LONDON - European stocks were steady but oil prices dipped further Tuesday after a global rout fuelled largely by fear that the fast-spreading Delta Covid virus variant could choke off the world's economic recovery.

Leading stock indices in London, Frankfurt and Paris were all essentially unchanged in afternoon deals.

All three bourses had slumped by more than two percent the previous day.

In New York, the Dow Jones index was a bit stronger as trading got underway on Wall Street.

"Stock markets (in Europe) have managed to find their footing... although for how long is debateable," said IG analyst Chris Beauchamp. 

"Virus worries and the expectations of a hit to economic growth have combined to knock back stock markets."

Asian equities earlier extended losses as the Covid Delta variant continues to cast a long shadow over trading floors.

Investors have been rattled in recent weeks by data showing the highly transmissible virus surging across the world, forcing some governments to reimpose containment measures.

Even countries with elevated vaccination rates have seen a big increase in new cases, though observers point out that hospitalisations and deaths are being kept down thanks to the jabs.

The selling has also been blamed on other factors including lingering worries about possible central bank policy tightening as the economy recovers.

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In Asia, Tokyo suffered a fifth straight loss Tuesday, while Shanghai, Hong Kong, Sydney, Seoul, Mumbai, Bangkok, Wellington and Taipei were also well in retreat.

- Staying positive -

Some commentators however remain broadly upbeat about the outlook.

"Those who have been inoculated should still have good protection against the Delta variant, according to the latest hospitalisation and mortality statistics," remarked JP Morgan Asset Management's Tai Hui. 

"Hence, the potential risk to economic reopening is manageable, especially in regions or states where vaccination rates are high."

Oil prices fell again after tumbling Monday on slowing demand prospects and after OPEC+ crude producers agreed to increase output from next month.

Source
AFP

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