Global stocks languished near two-week lows on Thursday, while the dollar crossed near a four-month high against the euro as nervous investors feared Europe’s response to Covid- 19 lags behind that of the United States.
European markets opened lower, with the Stoxx index of 600 European stocks falling 0.1% at the start of trading after a massive sell-off in the US overnight and not helped by data showing the strongest increase since January 9 in new confirmed cases of coronavirus in Germany. The number of people with COVID-19 in intensive care in France has reached a peak for 2021.
Extended lockdowns and concerns about the pace of vaccinations across Europe hampered the euro, which was down 0.1% against the dollar, to $ 1.1807.
The dollar index had hit its highest since November 2020 overnight, at 92.697, breaking its 200-day moving average.
“The dollar is absolutely essential,” said James Athey, chief investment officer at Aberdeen Standard Investments.
“While ‘reflation trade’ has been largely fueled by the US fiscal stimulus and therefore by growth and inflation expectations, it has also been fueled by rising input prices from rising commodity prices. raw.
“If the dollar starts to rise, it becomes a problem. This means weakness in commodities and weakness in emerging markets and it is starting to provide compensating disinflationary rhetoric. “
The MSCI global equities indicator was 0.03% lower, down for a second day and close to its lowest level in more than two weeks.
Its largest Asia-Pacific stock index outside of Japan fell 0.2 percent, bringing it closer to wiping out any gains it has recorded so far this year.
To weigh on sentiment was a sell-off in Chinese tech stocks amid fears of their delisting from U.S. stock exchanges and fears of a semiconductor shortage.
In Hong Kong, companies listed in the United States led declines. JD.com lost 3.57% and Alibaba fell 3.91%.
China’s blue-chip CSI300 index edged down 0.05%, to its lowest level since Dec. 11, weighed down by nervousness over policy tightening and rising tensions between China and Western countries in the about allegations of human rights violations in Xinjiang.
US equity futures showed a more stable start on Wall Street after Wednesday’s drop, with E-minis 0.3% firmer.
The US securities regulator is introducing measures that would kick foreign companies off US stock exchanges if they fail to comply with US auditing standards, and force them to disclose any government affiliations – measures widely expected to hit Chinese companies.
In addition to concerns about prolonged economic lockdowns in Europe, disruptions in the distribution of Covid-19 vaccines and potential tax hikes in the United States have also dampened investor sentiment.
“Rising interest rates, uncertainty in fiscal policy and worrying about inflation remain the priorities of investors. However, none of these themes point to a growing appetite for risk, ”said Peter Kenny of Kenny’s Commentary LLC and Strategic Board Solutions in Denver.
US crude fell 1.6% to $ 60.22 a barrel and Brent fell 1.3% to $ 63.56 a barrel, returning some gains made the day before after one of the biggest container ship of the world in the Suez Canal, blocking the vital shipping lane. .
Benchmark 10-year US Treasury yields hit 1.6209 percent, supported by positive data from the US manufacturing sector.
Investors focused on the 10-year Treasury yield, wondering if there was room for long-term interest rates, said David Kelly, chief global strategist at JPMorgan Asset Management.
“We know the economy is about to start really picking up steam in the second quarter,” Kelly said. “But we haven’t seen that acceleration yet, so that’s what we’re expecting.”
Germany’s 10-year government bond yield fell one basis point to 0.37%.