With losses ranging between 2% and more than 3%, the European and American equity markets suffered the blow on Monday. Investors are worried about the resurgence of Covid-19 cases and have taken refuge in the bond market.
At the end of a session that saw most European markets lose by more than 3%, Paris ended down 2.54%, London 2.34% when Frankfurt sank 2.62% and Milan by 3.34%. Same strong aversion to risk on Wall Street where the Dow Jones dropped 2.09%, the S&P 500 1.59% and the Nasdaq 1.06%.
We are witnessing “a crisis of pessimism in the markets today,” said Daniel Larrouturou, equity manager at Dôm Finance, to AFP. “It was thought that vaccination would contain the expansion of the virus and allow an almost total liberalization of the activity”, a scenario called into question “by the capping or the slower speed of vaccinations and the dissemination on the other hand much more rapid of virus in many countries, ”he notes.
The rise in the number of Covid-19 cases worries all regions of the world, but more particularly Europe, where the authorities are starting to reintroduce access restrictions.
In France, faced with a “stratospheric” recovery of the Covid-19 epidemic, the Council of Ministers adopted on Monday a bill integrating the vaccination obligation of caregivers and extending the health pass. Against the tide, England has cast off the mask and removed most of the restrictions linked to the pandemic, a step feared by many scientists and politicians, especially as the country is now the continent’s most affected in number of cases.
“We have had an accumulation of bad news” in recent days, summed up Art Hogan, head of strategy at National Securities, stressing that wearing a mask was again required in Los Angeles. In addition, “concerns about a large real estate company in China, which would have difficulty in repaying its debt, also weigh”, explains Daniel Larrouturou.
In this context, investors preferred to look to safe-haven securities, in particular government bonds. We are witnessing “a decline in equities and a shift in capital to much less risky assets, especially sovereign debt, the yield of which is falling sharply”, analyzes Daniel Larrouturou.
The interest rate on 10-year U.S. government bonds fell to 1.19% around 9:00 p.m. GMT (11:00 p.m. Swiss), its lowest since early February, from 1.29% at the close of Friday.
Tourism and its satellites on the front line
The tourism sector has suffered from the health situation and the new restrictions taken in Europe, in particular by Paris and London, which have tightened the conditions of access to their soil.
In London, cruise line Carnival plunged 8.27% to 1,297.20 pence. On the air side, Easyjet fell 6.62% to 769.60 pence and IAG fell 5.23% to 159.00 pence. In Paris, Air France lost 2.89% to 3.79 euros and Airbus sank 6.38% to 103.58 euros while Aéroports de Paris fell 3.82% to 103.35 euros . In Frankfurt, Lufthansa fell 2.94% to 9.44 euros. In the hotel industry, the British Intercontinental fell 3.53% to 4,537.00 pence and the French Accor by 3.67% to 28.91 euros.
Oil hits rock bottom
Oil prices fell by more than 6%, weighed down by the decision of the Organization of the Petroleum Exporting Countries and their Allies (Opep +) to increase their production at a time when the rise in Covid-19 cases threatens to ballast global demand.
A barrel of North Sea Brent for September delivery fell almost $ 5 or 6.75% to $ 68.62 in London. In New York, a barrel of WTI for August plunged 7.50% or $ 5.39 to $ 66.42.
A sharp drop in prices which by extension penalized companies in the sector. In London, BP fell 4.44% to 279.28 pence and Royal Dutch Shell fell 4.19% to 1,311.00 pence. In Paris, TotalEnergies lost 3.84% to 34.89 euros.
On the euro and bitcoin side
Around 6 p.m. GMT (8 p.m. Swiss), the euro gave up 0.10% against the greenback, at 1.1805 dollars, limiting its losses after having sunk to its lowest since the beginning of April at 1.1766 dollars towards 9:15 a.m. GMT (11:15 a.m. Swiss). Bitcoin fell 2.78% to $ 30,772.60.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
1 year 24 days
Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile.
This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies.