Fears Of COVID-19 “Second Wave” Spark Global Stock Sell-Off

Experts say that investors’ appetite for risk may have been affected the resurgence of COV-19 in many parts of the world. This reflected in the trends of early trading on Monday, which saw mass stock sell-offs around the world. Markets in Europe, Asia and the US all recorded wide ranged losses.

In Europe, London’s FTSE 100 opened down 2.1%, while Frankfurt’s DAX and Paris’s CAC 40 shed 2.8% and 2.4% respectively.

US futures and European stocks have been strongly affected by the surge in global coronavirus cases, causing prices to drop on Monday.

According to Finance Monthly report, “US futures painted an equally gloomy picture, which was largely confirmed as trading opened. The Dow Jones Industrial Average fell by 2.4%, S&P 500 futures by 1.9%, and Nasdaq by 1.4% on Monday morning.”

There were also overnight loses throughout Asia, with Japan’s Nikkei losing 3.4% and the Hong Kong Hang Seng falling by 2.1%. Markets in China’s also saw slightly lower losses; the Shanghai Composite fell by 1% and the Shenzen Component by 0.5%.

Analysts have hinted that these pull-backs the market is experiencing may be linked to the spike in reported cases in Beijing, which necessitated fresh quarantine measures.

In a statement on the markets on Sunday, Ed Yardeni, an investment strategist, commented: “Now that reopening is happening, there’s fear of suboptimal results: less social distancing triggering a second wave of the virus, followed by another round of lockdowns.”

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