Global stock markets are on a downward trend as worries over coronavirus have dented investor confidence.
The UK’s FTSE 100 fell by 2.3% to a three-month low of 6,844.39 on Monday’s “freedom day” due to disruption to businesses caused by self-isolating workers, reports the Times.
Other markets also fell, with the MSCI World index, which tracks stocks from 23 countries, down for the fifth day in a row, its worst performance since February 2020.
Unsure recovery
According to the FT, the falls reflect that markets are less sure about the trajectory of the post-pandemic recovery in the face of the Delta variant.
Mohammed Kazmi, a portfolio manager at Union Bancaire Privée, told the FT: “The hope was that vaccines would provide us with the endgame. Now investors are looking at the UK and there’s a bit of fear with regards to reopening so aggressively when cases are still so high.”
While the UK dispensed with many pandemic restrictions on Monday, France, the Netherlands and Spain introduced new ones, reports CNBC.
Consumer confidence
Barclays’ head of economics research, Christian Keller, said there were concerns that soaring infection rates could spur the emergence of new variants which could affect consumer confidence, demand, and labour supply
According to the FT, the stalling of China’s economic recovery recently is also a cause for concern, especially for developing economies that feed its demand for their commodities and other exports.
“That is certainly generating a lot of fears about how fast global growth can recover in a context where China is slowing,” said Phoenix Kalen, emerging market strategist at Société Générale in London.