Stocks, oil prices gain as European trading ends

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© ASANKA BRENDON RATNAYAKE Australia’s second largest city Melbourne entered a fresh lockdown owing to a resurgence in coronavirus cases

Stocks and oil prices rose in late European trading Tuesday, scraping back some heavy losses a day earlier over fears  that the fast-spreading Delta Covid variant could derail global economic recovery.

Stock indices in London, Frankfurt and Paris ended the day well in the black after spending part of the session hovering near the breakeven point.

All three bourses had slumped by more than two percent on Monday.

The Dow Jones index leapt higher in midday trading on Wall Street.

“These are nervy times for the markets,” noted Craig Erlam, a market analyst at the online broker Oanda.

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

Asian equities earlier extended losses as the Covid Delta variant continues to cast its 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.

In Asia, Tokyo suffered a fifth straight loss Tuesday, and most other leading markets 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.”

Erlam at Oanda said: “If that false sense of security also encourages greater risk taking – like removing all restrictions during a surge, for example – the second half of the year may not be as bright as many hoped.” 

Oil prices were higher in late European trading after tumbling Monday on slowing demand prospects and after OPEC+ crude producers agreed to increase output from next month.

– Key figures around 1600 GMT –

New York – Dow: UP 1.7 percent at 34,552.01 points

EURO STOXX 50: UP 0.7 percent at 3,956.34

London – FTSE 100: UP 0.5 percent at 6,881.13 (close)

Frankfurt – DAX 30: UP 0.6 percent at 15,216.27 (close)

Paris – CAC 40: UP by 0.8 percent at 6,346.85 (close)

Tokyo – Nikkei 225: DOWN 1.0 percent at 27,388.16 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 27,259.25 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,536.79 (close)

Euro/dollar: DOWN at $1.1770 from $1.1800 at 2100 GMT Monday

Pound/dollar: DOWN at $1.3606 from $1.3675

Euro/pound: UP at 86.51 from 86.28 pence

Dollar/yen: UP at 109.94 from 109.46 yen

Brent North Sea crude: UP 1.1 percent at $69.35 per barrel

West Texas Intermediate: UP 1.0 percent at $67.11 per barrel

dan-rfj/wai/ach 

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