Stock markets were weighed down by a combination of headwinds for growth on Monday, in particular the health situation in China which caused oil to fall.
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The European indices once more ended in a sharp decline: Paris lost 2.75%, Frankfurt 2.15%, London 2.32% and Milan 2.74%. On Friday, European markets had already lost around 1.5%.
Compared to its peak in early January, the Parisian rating has even lost 17.5% of its value.
After several weeks of losses, the New York Stock Exchange continued to give ground: the Dow Jones lost 1.44%, the S&P 500 2.13% and the Nasdaq index of technology companies fell 2.75% around 4:10 p.m. GMT .
Oil prices fell by around 5%, in the face of fears of a fall in demand for black gold with the sanitary measures taken in China to fight once morest COVID-19.
Around 4:05 p.m. GMT, the barrel of Brent, the benchmark for oil in Europe, for July maturity lost 4.79% to 107.03 dollars, and that of American WTI for delivery in June dropped 5.10% to 104.19 dollars.
Chinese authorities extended restrictions to Beijing on Monday, where millions of residents were working from home, and Shanghai remains in lockdown.
“The dogged pursuit of the zero COVID policy by the Chinese authorities raises concerns regarding the crippling effect it will have on the Chinese economy in the coming months,” said Michael Hewson, analyst at CMC Markets.
He points out that “problems on supply chains” persist in this context and might have “disastrous consequences on growth prospects”.
The effects of these health measures are already being felt: exports from China grew in April at their weakest pace for almost two years (+3.9%), with the containment of Shanghai which heavily penalizes activity economic.
In addition, the conflict in Ukraine, which is driving up commodity prices, presents an additional risk for the economy. Russian President Vladimir Putin remained on his positions on Monday, reaffirming that his army was fighting in Ukraine to defend “the fatherland” once morest an “unacceptable threat”.
Western countries continue to harden their position: the G7 countries have made a commitment to wean themselves off Russian oil, without giving a precise timetable.
Regarding the European embargo, the President of the European Commission is going to Hungary on Monday, where President Viktor Orban is blocking the proposed embargo on Russian oil.
Faced with this more than gloomy context, investors preferred to turn to less risky assets such as the dollar or bonds. Bond rates had earlier reached levels not seen in years, pushed by the rise in key rates from central banks, which are trying to curb record inflation.
Bitcoin, an asset considered risky, fell 3.37% to 33,090 dollars, following a decline of more than 8% in three days.
The greenback, a safe haven for investors, gained 0.12% once morest the euro, to 1.0557 dollars for one euro, around 4:05 p.m. GMT.