The European and U.S. stock markets and oil prices fell on Thursday as government bonds recovered as concerns revolved around the third wave of coronavirus in the eurozone.
The Stoxx Europe 600 stock index fell 0.7 percent, Germany’s Xetra Dax fell 0.9 percent, Britain’s FTSE 100 lost 1.1 percent, and the U.S. resource-laden index pulled stakes in energy producers.
The price of Brent oil, an international energy standard, fell 2.7 percent to $ 62.67 a barrel after gaining more than 6 percent on Wednesday after Ever Given, one of the world’s largest shipping containers, ran aground and blocked the Suez Canal. The rally proved temporary because the deteriorating viral situation in Europe has clouded the prospects for global fuel demand.
The S&P 500 lost 0.3 percent when Wall Street opened, as did the technology-focused Nasdaq Composite, putting both indices on course for the third day in a row.
European stock markets last week fared slightly worse than the blue-chip S&P 500 due to different outlook for the region’s economies based on their progress in delivering coronavirus vaccines.
The United States has now administered more doses of the vaccine than any other country. Continental Europe, however, is mired in tensions over vaccine delivery amid delayed introduction of stings and growing blockades across the bloc. On Wednesday night, German Chancellor Angela Merkel made a turnaround
a course of controversial Easter extinction, in a move that highlighted growing doubts about Germany’s handling of the pandemic.
“Activity in the U.S. appears to be strong for growth for the rest of the year, fueled by vaccination winds and unprecedented fiscal stimulus,” Barclays economist Christian Keller said.
“We expect Europe to make up for the vaccination in the next two quarters, but it will inevitably delay recovery.”
Maya Bhandari, a multi-asset portfolio manager at Columbia Threadneedle, said the Stoxx 600 enjoyed a “good ride,” scoring 424 points on March 17, just ashamed of its record results before the pandemic. She added that the third wave in Europe meant “we are stopping to make a report and we are really trying to focus our portfolios where we see the best earnings growth, and that is taking us to Asia and the US”.
Government debt prices rose as investors shielded themselves from falling stocks and were expected to raise their bonds to rebalance their portfolios at the end of the month.
The yield of the reference ten-year treasury, which moves inversely from the price, fell 0.02 percentage points to 1.60 percent. This yield, which affects the cost of borrowing worldwide, has risen by about 0.9 percent since the beginning of the year, as investors forecast higher inflation driven by growth, which erodes the yields on fixed-rate securities.
Yields on the German ten-year Bund fell 0.03 percentage points to minus 0.373 percent. The dollar, measured against a basket of currencies, added 0.1 percent to reach its highest level since November.