Global Stocks Tank on Fears of Second Coronavirus Wave
World equity markets tanked Monday, losing around three percent as investors fretted over mounting fears of a second wave of coronavirus and a lack of fresh central bank stimulus, dealers said.
The banking sector was also rocked by the findings of an international journalism investigation that claimed massive sums of allegedly dirty money have flowed for years through some of the world's largest banking institutions.
London stocks dived by 3.0 percent after Health Minister Matt Hancock warned Britain's coronavirus crisis was at a "tipping point", fueling expectations of more restrictions aimed at curbing Covid-19 as government experts said cases could mushroom.
On Wall Street, the Dow also joined the selloff, sliding 2.3 percent shortly after opening bell.
The broad-based S&P 500 and the tech-rich Nasdaq both gave up around two percent.
Frankfurt, Paris, Milan tumbled three percent while Madrid sank by 3.5 percent after a partial virus lockdown began in the Spanish capital's densely populated south.
The European single currency was pushed under $1.18 as dealers sought the traditional safety of the dollar, while oil prices shed almost 2.0 percent on weak energy demand concerns.
- 'Ice-cold sentiment' -
"Sentiment was ice cold in the markets... as the FTSE 100 fell sharply below the 6,000 (points) mark," remarked investment director Russ Mould at online broker AJ Bell.
"The move followed mixed trading in Asia and matched similar-sized drops on other European exchanges as investors weigh concerns around a new wave of coronavirus infections and fears that central banks are not immediately coming to the rescue with a fresh round of stimulus."
He added: "Travel stocks again faced severe turbulence amid the rising fears over new (government) restrictions -- with British Airways owner International Airlines Group the top FTSE 100 faller."
IAG stock spiralled 12.3 percent lower mid session to stand at 96.98 pence and no-frills rival EasyJet lost 8.1 percent to 496.40 pence.
Most Asian bourses also fell following a disappointing performance Friday on Wall Street, on growing alarm over an uptick in coronavirus infections in Europe and the United States -- as well as the lack of movement in Washington on a new stimulus.
- Banking turmoil -
Shares in major banks dived after Buzzfeed News and the International Consortium of Investigative Journalists published findings over dirty money allegedly flowing through institutions.
"Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks' own employees," according to the probe.
The investigation points in particular to five major banks -- JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank and Bank of New York Mellon.
The five all saw their share prices fall back Monday - JPMorgan losing 2.7 percent, HSBC off some three percent, Standard Chartered off 4.7 percent, Deutsche losing almost seven percent and Bak of New York Mellon down 1.9 percent
Elsewhere, Sweden unveiled a budget including a plan to reboot the virus-hit economy with a ten billion euro stimulus which will take the country's finances into deficit for the first time in five years by 4.2 percent of GDP this year and 1.6 percent next year.
- Key figures around 1350 GMT -
New York - Dow Jones: DOWN 2.3 percent at 27,034.10
London - FTSE 100: DOWN 3.2 percent at 5,816.83 points
Frankfurt - DAX 30: DOWN 3.6 percent at 12,647.64
Paris - CAC 40: DOWN 3.2 percent at 4,817.99
Madrid - IBEX 35: DOWN 2.8 percent at 6,635.90
Milan - FTSE MIB: DOWN 3.0 percent at 18,938.23
EURO STOXX 50: DOWN 3.3 percent at 3,174.10
Hong Kong - Hang Seng: DOWN 2.1 percent at 23,950.69 (close)
Shanghai - Composite: DOWN 0.6 percent at 3,316.94 (close)
Tokyo - Nikkei 225: Closed for a holiday
Euro/dollar: DOWN at $1.1771 from $1.1840 at 2100 GMT
Pound/dollar: DOWN at $1.2829 from $1.2917
Euro/pound: UP at 91.76 pence from 91.66 pence
Dollar/yen: DOWN at 104.44 yen from 104.57 yen
West Texas Intermediate: DOWN 1.9 percent at $40.34 per barrel
Brent North Sea crude: DOWN 1.8 percent at $42.39