A serious of tougher covid-19 restrictions across Europe sent the markets spiralling on Thursday, one of investors’ regular reminders that, however much they try and deny it, the pandemic is still very much a thing.
The headline announcement was the imposition of a 9pm to 6am curfew in Paris, and 8 other French cities, that will be in place for at least six weeks. In Germany – which just saw its own record daily case increase – the new restrictions were less severe, but still include limits on the number of people at private gatherings, and curfews on bars and restaurants in the worst hit areas.
And the tightening continued, with bar and restaurant closures in the northeastern region of Catalonia in Spain, new mask restrictions in the Netherlands, and the shuttering of non-essential retailers, gyms and leisure centres in Ireland.
It was a sharp and loud wake-up call, the kind the market often seems to sleep through, but one that was hard to ignore this Thursday. The DAX tanked 2.1%., or 280 points, as it dropped to a 2-week low of 12,750. The CAC was a smidge better, though that still translated to a 1.6% decline.
There was no escaping for the FTSE, either. Fearful that such restrictions could well be on their way – especially since there is more and more support, if outside the Cabinet, for a 2 to 3-week ‘circuit breaker’ – the UK index sank 2%, leaving it just above 5820 for the first time in a month and a half.
For the pound, the Brexit-deadline-delay boost proved to be short-lived, investors setting the issue aside as sterling dipped 0.2% against the dollar and 0.1% against the euro.
As for the Dow Jones, after shedding 150 points yesterday evening as Treasury Secretary Steven Mnuchin poured cold water on the idea of a pre-election stimulus package, it is set for another 160 point slide once trading starts stateside. That’d push it back to 28,350, undoing 7 days’ worth of growth.
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