Global stocks on Monday suffered their worst one-day decline since the early months of the coronavirus pandemic in 2020, as investors fret about signs of slowdowns in the world’s large economies at a time when central banks are reining in crisis-era stimulus measures.
The FTSE All-World barometer of global equities dropped 3 per cent, its sharpest fall since June 2020, and hit its lowest level since December 2020.
Worries over rising rates have been compounded by indications that growth in big global economies could be slowing. Chinese export growth fell to its lowest level in two years last month, according to data released on Monday, which followed reports last week pointing to slowdowns in the German and French manufacturing sectors.
Wall Street’s blue-chip S&P 500 index slid 3.2 percent and the tech-focused Nasdaq Composite dropped 4-3 percent. Europe’s regional Stoxx 600 index fell 2.9 percent, while China’s CSI 300 fell 0.8 percent and Tokyo’s Topix fell 2 percent.
‘It’s difficult to say if everything is low enough and bearish enough,” said Joost van Leenders, equity strategist at Kempen Capital Management, adding that investors no longer expected the Fed to prioritise stabilising financial markets, as it did during the start of the coronavirus pandemic.
Brent crude, the international oil benchmark, dropped almost 6 percent to $105-94 a barrel, reflecting concerns about weaker demand.
Natural gas futures fell even more steeply than crude oil, with the Henry Hub front-month contract down more than 12 percent in the US afternoon, to just over $7 per million British thermal units.
Analysts said forecasts for warmer-than-expected weather in the US and another hefty injection into storage were partly behind the sell-off, which came after Henry Hub hit a 14-year high last week.
The Fed last week lifted its main interest rate by 0.5 percentage points and signaled that more increases of the same magnitude were on the horizon as it attempts to cool scorching inflation.