European stocks stalled after delta fuel recession

European equities struggled to recover the losses from the global decline in stock prices in the previous session. This is because caution against the spread of delta variants of the coronavirus has overturned the enthusiasm for strong corporate profits.

The Stoxx 600 index rose 0.2% after showing the biggest decline of the year on Monday after UBS reported: Rapid increase in quarterly earnings The Banking and Wealth Management divisions increased European banking stocks by 0.4%.

Brent crude, an international oil marker, rose 0.3% to $ 68.82 a barrel after falling nearly 7% on Monday. This is because the turmoil over global economic growth has been exacerbated by the producer group OPEC +. I agree Increase monthly production of 400,000 barrels.

The rapid spread of the coronavirus delta strain has hit developing countries hard. New social restrictions in In Asia-Pacific countries where the virus appeared to be controlled before and British companies were suffering from a labor shortage.

Despite concerns about new virus variants, many investors remain optimistic as they continue to consider strong fundamentals in many major countries.

Analysts expect companies listed on the MSCI European Index to report earnings growth of 109% year-on-year in the second quarter, but a recent Bank of America survey found that fund managers are the main players. Stoxx is expected to rise this year.

Mary Bateman, Senior Multi-Asset Strategist at State Street Global Markets, said: “Economic recovery, better returns, ultra-easy monetary policy, and lots of money in the side business from savings and cheap borrowing. It’s all still there.”

However, Goldman Sachs strategists warned that the US economic recovery from last year’s coronavirus shutdown peaked and high inflation caused “a risk of prolonged pessimism in the short term.” .. Pressured The Federal Reserve rolls back financial stimulus in the pandemic era.

Futures markets have shown that Wall Street’s S & P 500 Index will rise 0.3% in early New York trading, following a 1.6% loss on Monday. This is the biggest plunge in more than two months.

Benchmark 10-year Treasury yields, which are inversely proportional to price, were flat at 1.18%, the lowest level since February after traders flocked to shelter assets on Monday.

“Investors are concerned that new outbreaks could hinder the pace of economic resumption,” said Thai Hui, chief Asian market strategist at JP Morgan Asset Management. “The next 1-2 months will be an important litmus test of government strategy in normalizing livelihoods and economic activity.”

In Asia, Japan’s benchmark Topix fell 1%, while Hong Kong’s Hang Seng Index fell 0.8%, reversing its initial rise.

In currencies, the pound sterling fell 0.7% on Monday and then fell 0.2% against the dollar to $ 1.364, the lowest level since early February.

The US Centers for Disease Control and Prevention placed Britain at the top of Covid’s travel warnings on Monday, urging Americans not to visit as Britain lifted most social restrictions during the surge in Delta cases. did.

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European stocks stalled after delta fuel recession

Source link European stocks stalled after delta fuel recession

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