Global stocks, oil prices slip as rising COVID cases prompt Chinese lockdowns

  • China has reported 26,824 cases of COVID-19 and two deaths
  • The price of oil fell by 5 percent
  • Wall Street stocks are trading lower
  • The US dollar is rising
  • Benchmark 10-yield slips

NEW YORK, Nov 21 (Reuters) – Global stocks and oil prices slipped on Monday as a surge in COVID-19 cases and newly registered deaths in China prompted authorities in the world’s second-largest economy to roll back conclusions, raising concerns about the impact on the economy.

Beijing’s most populous district urged residents to stay home on Monday as the city’s number of COVID-19 cases surged, while at least one district in Guangzhou was locked down for five days.

“Zero COVID seemed to be moving in the right direction and everyone was excited, but the Chinese government is taking some strong measures and in the short term there will be matches up and running,” said Thomas Hayes, president of Great Hill Capital in New York. York.

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MSCI’s broadest index of world shares (.MIWD00000PUS) fell 0.92%, while European shares (.STOXX) were flat.

On Wall Street, all three major indexes traded lower, led by a sell-off in technology, energy and consumer discretionary stocks.

The Dow Jones Industrial Average (.DJI) fell 0.29% to 33,646.88, the S&P 500 (.SPX) lost 0.58% to 3,942.36 and the Nasdaq Composite (.IXIC) fell 1.16% to 11,01,01.

Oil prices hit their lowest level since early January on concerns about reduced Chinese demand for the fuel due to the COVID-19 lockdown, as well as reports that Saudi Arabia and other OPEC members are in talks to potentially raise production.

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Brent crude futures for January fell 5.32% to $75.82 a barrel, while US West Texas Intermediate (WTI) futures for December were down 5.19% to $83.07.

“With oil, there’s always a supply and demand picture and right now the market is looking for insight on the demand side,” said Cliff Hodge, chief investment officer at Cornerstone Wealth in Charlotte, North Carolina.

“Typically oil demand will decline and there will be a slowdown or global recession especially this year, which we think will be somewhat exacerbated by China,” Hodge added.

The US dollar advanced against most major currencies, paring recent losses, as traders shunned riskier currencies amid concerns about the global economic outlook from China’s COVID-19 restrictions. The dollar index rose 0.926%, while the euro fell 0.87% to $1.0234.

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Long-term U.S. Treasury yields edged lower at the start of the Thanksgiving-shortened week after data suggested the U.S. economy was slowing. The yield on the 10-year note fell to 3.8119%, while the yield on the 30-year Treasury slipped to 3.8961%.

Gold prices slipped to their lowest level in more than a week as the dollar extended gains while market attention turned to the US Federal Reserve’s November notes due this week.

Spot gold was down 0.8% at $1,735.89 an ounce, while U.S. gold futures were down 0.90% at $1,736.10 an ounce.

Reporting by Chibuike Oguh in New York, Editing by Deepa Babington and Chris Rees

Our standards: Thomson Reuters Trust Principles.

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