Markets plunge on China lockdowns, rate hike fears
Stock markets and oil prices sank on Monday on growing concern that lockdowns in China aimed at fighting a worsening COVID outbreak could further harm a world economy battling decades-high inflation.
The losses extended last week’s sell-off triggered by Federal Reserve boss Jerome Powell indicating that the US central bank would hike interest rates by half a percentage point next month and possibly several times more this year.
Among the world’s major stock markets, Shanghai led the losses, closing down more than five per cent. In Europe, Paris shed 2.3 per cent approaching the half-way stage.
French President Emmanuel Macron is set to begin efforts to unite a deeply divided nation after winning re-election on Sunday in a battle against rival Marine Le Pen that saw the far right come its closest to taking power.
In foreign exchange on Monday, the euro slid against the dollar, while oil prices at one point tumbled more than five per cent. The dollar was up sharply also against the pound, but down versus the yen, seen as a haven investment in times of economic turbulence.
“The markets have fallen out of bed... in a big way,” noted AJ Bell investment director Russ Mould. “The...