GLOBAL MARKETS-Stocks slide on 'fragile' mood; oil surges after steep loss
(New throughout, updates prices, market activity and comments through close of U.S. trading)
NEW YORK, March 24 (Reuters) – Global equities dipped and the dollar hovered near four-month highs on Wednesday as concerns about extended economic lockdowns in Europe and the potential for higher taxes in the United States weighed on investor sentiment.
European shares closed near two-week lows, while oil prices surged after steep losses on Tuesday after one of the world’s largest container ships ran aground in the Suez Canal. Authorities were still trying to clear the ship from the vital shipping lane on Wednesday afternoon.
“The mood is fairly fragile as all the optimism that characterized the push higher over the past two or three weeks in shares is starting to bleed away on talk of a European third wave and extensions of pandemic lockdowns in Germany and France,” said Michael Hewson, chief market analyst at CMC Markets.
MSCI’s gauge of stocks across the globe shed 0.94% following steep declines in Asia and modest losses in Europe.
On Wall Street, the Dow Jones Industrial Average fell 2.37 points, or 0.01%, to 32,420.78, the S&P 500 lost 21.37 points, or 0.55%, to 3,889.15 and the Nasdaq Composite dropped 265.81 points, or 2.01%, to 12,961.89.
The Ifo Institute said Germany’s extended lockdown is delaying a recovery. It cut its 2021 growth forecast for Europe’s biggest economy to 3.7% from 4.2% previously.
The IHS Markit euro zone flash composite purchasing management index rose to 52.5 in March from 48.8 in February in a surprise return to growth, as factories ramped up production at the fastest pace in over 23 years.
But April numbers could be hit by surging COVID-19 infections across Europe.
Benchmark 10-year notes last rose 8/32 in price to yield 1.6102%, from 1.638% late on Tuesday.
U.S. Treasury Secretary Janet Yellen said on Tuesday the American economy remains in crisis from the pandemic as she defended developing plans for future tax increases to pay for new public investments.
Federal Reserve Chair Jerome Powell told U.S. lawmakers that a coming round of post-pandemic price increases will not fuel a destructive breakout of inflation.
The dollar index rose 0.156%, with the euro down 0.27% to $1.1817.
“We are definitely in that mode of a potential further reduction in risk, which would be supportive for the dollar,” said Derek Halpenny, head of research for global markets at MUFG.
“If you were to pick a top concern, then it would be the COVID situation, with new cases in emerging markets back to record highs and what’s happening in Europe. It does not tally with global optimism for synchronised global growth,” Halpenny added.
Bitcoin rose as much as 5% before paring most of its as Tesla Inc chief executive Elon Musk said the company’s electric vehicles can now be bought using bitcoin.
U.S. crude rose 5.14% to $60.73 per barrel and Brent was at $64.18, up 5.58% on the day.
Spot gold added 0.4% to $1,733.76 an ounce.
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