Stock Markets and Oil Prices Dive as COVID-19 Cases Rise
As the west saw a surge in the spread of coronavirus over the weekend, a rise in Libyan oil production and continued lack of US stimulus combined to drive stocks down.
Stocks experienced a sharp sell-off on Monday, with a significant rise in COVID-19 cases in Europe and the Americas and a US stimulus deal still nowhere in sight.
In Europe, the DAX opened 2.7% down, while the CAC 40 fell 1.4% and the FTSE 100 fell 1.1%. Milan’s FTSE MIB shed 1.5%, and Spain’s IBEX dropped 1%.
Asian markets showed more mixed results overnight, with South Korea’s KOSPI and China’s Shenzen Component both gaining 0.5% while Japan’s Nikkei ended flat and the Shanghai Composite fell by 0.8%. The Hong Kong Hang Seng rose by 0.5%.
US futures also opened far lower, with futures attached to the S&P 500 and Dow Jones Industrial Average both falling by 1% and Nasdaq futures falling by 0.8%. The slump points to a probable sell-off when Wall Street opens later today.
The US saw its highest ever daily total of confirmed new COVID-19 cases on Friday, rising as high as 83,757 – a total that was almost reached again on Saturday.
France also recorded a new daily case high over the weekend, with 52,010 positive cases confirmed on Sunday. A 9pm curfew across two-thirds of France came into force on Friday night, while Italy and Spain announced tighter measures on Sunday. Spain has now declared a state of emergency.
Oil prices also saw a slide in advance of a Libyan expansion in crude production, causing demand concerns that have been compounded by the global surge in COVID-19 cases. West Texas Intermediate Crude fell 3.3%, trading at $38.54, while Brent crude fell 2.25% to $40.83 per barrel.
A pricing war earlier this year, in conjunction with the early onset of the COVID-19 pandemic, led to a precipitous global decline in oil prices, with West Texas Intermediate prices falling below 0% for the first time in history.