European stock markets and commodities tumble due to Fed shrinking concerns


Stock update

European stock markets opened sharply on Thursday, and commodities were also under heavy pressure due to increased concerns about US monetary policy and the re-spread of the coronavirus.

The major exchanges in the region fell in early trading, with the London FTSE 100 index falling by about 2%. The Stoxx 600 index in Europe fell 1.4%, the Dax index in Frankfurt fell 1.3%, and the Cac 40 index in Paris fell 1.8%.

Traders have also shifted from other risky asset classes, causing the prices of oil and industrial metals to fall sharply. Copper, the most important industrial metal in the world, fell 2% to a five-month low of less than US$9,000 per ton.

After the US Standard & Poor’s 500 Index fell 1% overnight, the trading session was gloomy. Previously, the minutes of the Fed’s July policy meeting showed Most decision makers It is ready to begin to relax the central bank’s huge stimulus plan later this year.

The Fed’s $120 billion in asset purchases per month is a key pillar for the global market’s rebound from the most severe period of the coronavirus crisis in March 2020. However, with the rapid improvement in the US labor market and the sharp rise in inflation, central bank governors are now planning for them to withdraw from extraordinary measures.

Fahad Kamal, chief investment officer of Kleinwort Hambros, the private banking division of Societe Generale, said: “It is undeniable that one of the factors that boosted the market throughout the year was US$120 billion per month.” “Obviously, as it gradually decreases, people are beginning to worry.”

With the spread of the coronavirus in Asia and supply bottlenecks hindering the output of key industries, the Federal Reserve will begin to reduce quantitative easing. As the signs of quantitative easing appear, people are increasingly concerned about the slowdown in economic growth in China, the world’s largest consumer of raw materials. Feeling worried. Concerns about weak Chinese demand caused mining stocks to fall, with Rio Tinto and Glencore both falling by more than 3%.

Concerns about variants of the Delta coronavirus have also intensified A new study The report published on Thursday found that the protection from BioNTech/Pfizer injections declined faster than the protection from Oxford/AstraZeneca injections. Due to continuing uncertainty, airlines including British Airways parent company International Airline Group and EasyJet have fallen.

Investors have begun to adopt more Defensive posture In recent weeks, the flow to exchange-traded funds has been tracked based on data. Global stock markets have recorded considerable gains this year, with the MSCI Global Barometer Index up about 12%.

However, some fund managers are beginning to worry about how much the market will rise further, especially after a sensational corporate earnings season has set high standards for the rest of 2021.

Due to weaker-than-expected data released by China, the Asian market faced a sharp sell-off earlier this week and also fell. The Hang Seng Index fell 2.5%.Many pharmaceutical companies, including CSPC, WuXi AppTec, and China Biopharmaceuticals, incurred significant losses Efficacy of Covid vaccine Made in China.

The outbreak of the Delta variant in Southeast Asia, coupled with the supply of microchips, caused Toyota to reduce its September global production by 40% compared to its previous plan.

The U.S. dollar strengthened sharply in early trading. The pound fell 0.4% against the dollar to $1.37, while the euro fell 0.1% against the dollar to $1.1729.

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