Global markets sank on Monday, and Wall Street prepared for a downtrend, as investors raised concerns about a sudden surge in the Omicron version and the latest dire forecasts about a significant blow to President Biden’s efforts to pass a massive domestic policy bill. took in.
When US markets opened, the S&P 500 was set to fall more than 1 percent, futures showed. In Europe, the markets were down 1 to 2 percent, the Stoxx Europe 600 was down 1.5 percent. Asian indices closed lower.
“The broad nature of Omicron and its potential impact in increasingly slowing global growth continues to haunt investors,” Susanna Streeter, an analyst at Hargreaves Lansdowne, wrote in a note to clients. “Uncertainty about the year ahead is looming large in the markets.”
Over the weekend, more European countries announced restrictions to control the spread of the coronavirus. The Netherlands on Saturday became the first European country to announce a lockdown in response to the variant. Britain’s health secretary said on Sunday he could not rule out imposing new restrictions before Christmas. Minister Sajid Javid did not deny speculation that the government is considering a two-week “circuit breaker”, which could mean a ban on pubs and restaurants.
Germany’s central bank, the Bundesbank, said it would lower its predictions of economic growth because of recent pandemic restrictions. The bank estimates that the German economy will grow by 2.5 percent in the current quarter, down from the 3.7 percent growth projected in June.
Airline and travel stocks fell heavily in early European trading. But the biggest drop on Britain’s FTSE 100 was Informa, which largely organizes individual events. It fell 4.5 percent after falling 6.9 percent earlier.
In the United States, the future of President Biden’s $2.2 trillion domestic policy bill was put in doubt after West Virginia Democrat Senator Joe Manchin III said he would vote against it because he feared it would provoke inflation. .
This started affecting the prospects of the economy, which increased the negative sentiment in the markets. Goldman Sachs said in a research note that it will reduce its projected growth for the US economy next year.
Oil prices also registered a fall on Monday. West Texas Intermediate futures, the US benchmark, fell more than 3 per cent to $68.66 a barrel. Energy stocks were among the biggest losers in global markets.
Shares of Moderna rose 5 percent in premarket trading after the vaccine maker said a triple or booster shot raised antibody levels high enough to thwart the Omicron version.