Global stocks decline as US, China fear coronavirus outbreaks

Dow (indu) Futures sank more than 800 points, or 3.2%, prolonging losses ahead of the opening. S&P 500 (SPX) Futures fell by 3%, and Nasdaq (COMP) Futures fell 2.3%.
Markets across Asia also saw a sharp decline after Beijing fresh accumulation of virus originating from the city’s largest wholesale food market. The Chinese capital has recorded 79 new cases since a locally transmitted infection was recorded for the first time in almost two months last Friday.

China also reported economic data, suggesting that the recovery of the world’s second largest economy is progressing slowly.

Japanese Nikkei (N225) completed 3.5%. South Korea Kospi (KOSPI) lost 4.8%, concluding its worst day since March. Hong Kong Hang Seng index (HSI) fell 2.1%, and the Chinese Shanghai Composite (SHCOMP) refused 1%.
European markets have largely fallen openly. FTSE 100 (UKX) fell 2.4% in London. German DAX (DAX) fell 2.5%, while France CAC 40 (CAC40) fell 2.6%.
For weeks, Wall Street has emerged to be increasingly detached from the rest of the world – high stock gains seemed incompatible with relatively high unemployment and other data showing the economy is struggling. But markets have begun to catch up with reality, and despite a small recovery on Friday, U.S. indices are preparing for a sharp decline that is set to begin this week.
As much of the United States begins to reopen after the coronavirus is stopped, scientists and health experts warn of the potential of a second wave of the virus that could have devastating effects on the economy. Several U.S. states that reopened a few weeks ago are now reporting an increasing number of infections and hospitalizations.
The second wave could undermine extreme optimism about an economy that has catapulted U.S. stocks to record highs.

In China, meanwhile, signs of a new wave of the virus could stipulate an already slow economic recovery.

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Industrial production, investment activity and retail sales improved compared to previous months, according to data released by China’s Central Bureau of Statistics on Monday. However, all three readings fell below the analysts’ predictions examined by Refinitiv.

“Finally, the will of consumers is to leave their apartments due to permanent social distancing – either from government mandates or due to consumer behavior – [that] it will dictate the speed of recovery, “wrote Stephen Innes, chief global markets strategist at AxiCorp, in a research note.” But the Chinese consumer-led recovery is not moving fast forward with any part of the imagination. “

Although some economists have pointed to positive signs. Activity in the country’s services sector expanded for the first time this year, according to China’s national industry service delivery index. The index measures changes in the production of the service sector every month.

“Total economic output returned above 2019 levels in May, for the first time since the Covid-19 epidemic,” wrote Martin Rasmussen, a Chinese economist in the capital economy, in a discussion of the study. “Earlier, we thought the Chinese economy would not return to positive year-on-year growth until [the third quarter]But today’s data suggests that a milestone could be reached in this quarter. “

The oil also went lower. U.S. oil fell 4.1% in the future, trading at $ 34.76 a barrel. Brent, the global oil benchmark, lost 3.4% to $ 37.49 a barrel. Brent and U.S. oil prices fell more than 8% last week amid concerns about a resurgence of the pandemic.

– Matt Egan and Anneken Tappe contributed to this report.

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