European stocks dip after new UK lockdown

LONDON: European stock markets drifted lower yesterday, echoing a subdued performance on Wall Street overnight, as investors fretted over a worsening coronavirus crisis after Britain imposed a fresh lockdown. London stocks dipped 0.1 percent in midday deals after the UK government implemented new national restrictions set to last weeks-but also announced an extra £4.6-billion package for virus-battered businesses.

In early afternoon eurozone deals, Frankfurt and Paris each lost 0.3 percent. World oil prices edged upwards before the outcome of this afternoon’s output meeting of the OPEC crude producers’ cartel and its allies. “The mood has soured somewhat as a result of the national lockdowns which are once again coming into force or being extended,” OANDA analyst Craig Erlam told AFP.

“This was maybe inevitable anyway as a result of the (Christmas) festivities taking place in the midst of an already severe wave of COVID-19 but the new variant has thrown another spanner in the works.” He added: “The mood may sour further if these lockdowns do not bring the virus back under control soon.” England’s six-week lockdown, which began at midnight, emulates the first national coronavirus curbs in place from March to June-but goes further than another instituted in November when schools remained open.

In recent months, governments worldwide have tightened or prolonged lockdown restrictions to combat the health crisis. Asian equities mostly rebounded yesterday on hopes that new lockdowns and ongoing vaccine rollouts would help beat the coronavirus crisis, dealers said. Yet Wall Street struggled in the first session of 2021 on Monday, pulling back from records also on anxiety over the Georgia Senate run-off elections-which will decide the balance of power in the upper house of Congress.

While analysts are broadly upbeat about the long-term outlook this year, the nascent Covid-19 vaccine programs have yet to have an impact, meaning the first few months of this year will likely be bumpy. “The upside compared to last year is that there are now multiple vaccines being rolled out so we can see the light at the end of the tunnel-but that does not mean we cannot see significant economic damage in the interim,” noted Erlam.

The task ahead was laid bare by data showing almost 280,000 Americans were infected in one day, while the country’s death toll passed 300,000. Separately, bitcoin was sitting at $31,000 after seeing recent wild swings saw it hit a record near $35,000 before diving to $28,000 within the space of a day. – AFP

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