Fallout from Omicron, China pushes global markets down

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New York (AFP) – European and U.S. stock markets fell on Thursday as traders tracked developments surrounding the Omicron variant of the coronavirus and the fallout from the Chinese real estate crisis.

The Dow finished flat, but the Nasdaq and the S&P 500 both fell despite data showing that new jobless claims in the United States fell sharply last week, taking them to levels not seen since. 1969 for the second time this year.

Index declines ended a three-day rally that brought Wall Street close to record territory, as traders await Friday’s release of the latest consumer price data in the United States, which is expected to show an increase of inflation last month.

“I don’t see where the selling pressure is really coming from,” said Maris Ogg of Tower Bridge Advisors. “I’m also not sure where the buying pressure comes from is very clear. So we’re probably just procrastinating for the rest of the year.”

London’s benchmark FTSE 100 lost 0.2% after UK government tightened virus restrictions in England as cases of Omicron variants rise, including advice for working from home and Covid passports mandatory.

The pound has also been hit as this country and others grapple with soaring inflation, further threatening the economic recovery.

“It is clear that the momentum we experienced earlier this week has indeed faded,” said analyst Fawad Razaqzada at ThinkMarkets.

“Investors are wary of major central bank meetings coming up next week and do not wish to be overly exposed before these.”

Brazil’s central bank on Wednesday raised its benchmark interest rate by 150 basis points for the second time in a row, even as Latin America’s largest economy is in recession.

China on Thursday announced that consumer price inflation hit its highest level for more than a year in November.

Fears of contagion

Investors were also concerned about the debt crisis in China’s real estate sector.

Two major Chinese real estate companies have defaulted on $ 1.6 billion in bonds to foreign creditors, Fitch Ratings said Thursday, as contagion spreads through the country’s debt-riddled real estate sector.

Fitch confirmed that Evergrande first defaulted on more than $ 1.2 billion in bond debt, lowering the company’s status to a narrow default rating.

Fitch also confirmed that Kaisa, a smaller real estate company but one of the most indebted in China, had defaulted on $ 400 million in bonds.

Elsewhere on Thursday, the Italian antitrust authority said it had fined Amazon 1.1 billion euros ($ 1.3 billion) for allegedly abusing its dominant position in e-commerce logistics.

Bitcoin fell back below $ 50,000.

“There are several reasons cryptos have come under pressure lately,” said Razaqzada, highlighting concerns about Omicron’s economic impact on risky assets and the reduction of central bank stimulus measures, which means that there will be less and less money flooding the markets.

Key figures around 9:50 p.m. GMT

New York – Dow: FLAT at 35,754.69 (closing)

New York – S&P 500: DOWN 0.7% to 4,667.45 (close)

New York – Nasdaq: DOWN 1.7% to 15,517.37 (close)

EURO STOXX 50: DOWN 0.6% to 4,208.30 (closing)

London – FTSE 100: DOWN 0.2% to 7,321.26 (close)

Frankfurt – DAX: DOWN 0.3% to 15,639.26 (closing)

Paris – CAC 40: DROP less than 0.1% to 7,008.23 (closing)

Tokyo – Nikkei 225: DOWN 0.5% to 28,725.47 (close)

Hong Kong – Hang Seng Index: EN up 1.1% to 24,254.86 (close)

Shanghai – Composite: UP 1.0% to 3,673.04 (closing)

North Sea Brent: DOWN 2.3% to $ 74.02 per barrel

West Texas Intermediate: DOWN 2.5% to $ 70.58 per barrel

Euro / dollar: at $ 1.1293 vs. $ 1.1281

Pound / dollar: DOWN to $ 1.3216 from $ 1.3248

Euro / pound: up to 85.38 pence against 85.15 pence

Dollar / yen: DROP to 113.44 yen against 113.47 yen

strawberries-rl / tgb / cs / md

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