European stocks steady after Delta fuels global rout

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Picture: iStock
  • European stocks and oil prices rebounded slightly on Tuesday.
  • The London stock market gained half a percentage point.
  • Frankfurt added 0.2% and Paris won 0.7% in early afternoon deals.

European stocks and oil prices rebounded only slightly on Tuesday after a global rout fuelled largely by fear that the fast-spreading Delta virus variant could choke off the world's economic recovery.

The London stock market gained half a percentage point, while Frankfurt added 0.2% and Paris won 0.7% in early afternoon deals.

All three bourses had slumped by more than two% the previous day.

"Stock markets (in Europe) have managed to find their footing... although for how long is debateable," said IG analyst Chris Beauchamp.

"Virus worries and the expectations of a hit to economic growth have combined to knock back stock markets."

Asian equities earlier extended losses as the Covid Delta variant continues to cast a long shadow over trading floors.

Investors have been rattled in recent weeks by data showing the highly transmissible virus surging across the world, forcing some governments to reimpose containment measures.

Even countries with elevated vaccination rates have seen a big increase in new cases, though observers point out that hospitalisations and deaths are being kept down thanks to the jabs.

The selling has also been blamed on other factors including lingering worries about possible central bank policy tightening as the economy recovers.

Wall Street's three main indices all ended deep in the red Monday, with the Dow shedding more than two% while the Nasdaq and S&P 500 were more than one% off.

And losses continued in Asia, where Tokyo suffered a fifth straight loss Tuesday, while Shanghai, Hong Kong, Sydney, Seoul, Mumbai, Bangkok, Wellington and Taipei were also well in retreat.

- Staying positive -

Some commentators however remain broadly upbeat about the outlook.

"Those who have been inoculated should still have good protection against the Delta variant, according to the latest hospitalisation and mortality statistics," remarked JP Morgan Asset Management's Tai Hui.

"Hence, the potential risk to economic reopening is manageable, especially in regions or states where vaccination rates are high."

Oil prices recovered a bit after tumbling on slowing demand prospects and after OPEC+ crude producers agreed to increase output from next month.

Benchmark crude contract WTI had tanked by 7.5% Monday, while Brent plunged by 6.8 percent.

Key figures around 1100 GMT

·       London - FTSE 100: UP 0.5% at 6,877.09 points

·       Frankfurt - DAX 30: UP 0.2% at 15,170.21Paris - CAC 40: UP 0.7% at 6,339.52

·       EURO STOXX 50: UP 0.4% at 3 945.20

·       Tokyo - Nikkei 225: DOWN 1.0% at 27 388.16 (close)

·       Hong Kong - Hang Seng Index: DOWN 0.8% at 27 259.25 (close)

·       Shanghai - Composite: DOWN 0.1% at 3 536.79 (close)

·       New York - Dow: DOWN 2.1% at 33 962.04 (close)

·       Euro/dollar: DOWN at $1.1785 from $1.1800 at 2100 GMT Monday

·       Pound/dollar: DOWN at $1.3660 from $1.3675

·       Euro/pound: DOWN at 86.27 from 86.28 pence

·       Dollar/yen: UP at 109.65 from 109.46 yen

·       Brent North Sea crude: UP 0.3% at $68.83 per barrel

·       West Texas Intermediate: UP 0.6% at $66.84 per barrel

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