Global stocks and oil fall on fears of confinement in Beijing

The worst outbreak of covid-19 in China slows down the economy of the Asian giant 1:11

(CNN Business) ––

Global stocks and oil prices fell on Monday, as the increase in positive cases of covid-19 in Beijing sparks fears that the Chinese capital could face a confinement like that of Shanghai and others. major cities.

• "April Voices": Chinese Internet Users Protest Censorship of Shanghai Lockdown Video

China's benchmark Shanghai Composite Index plunged 5.1% to close at a 22-month low.

It was the worst day for the index since February 3, 2020, when the initial coronavirus outbreak first rocked the country's stock market.

Elsewhere in the region, Hong Kong's Hang Seng Index fell 3.7%, while Japan's Nikkei fell 1.9% and Korea's Kospi lost 1.7%.

Covid-19 restrictions affect Chinese economy 1:05

European stocks also opened sharply lower on Monday.

The FTSE 100 fell 2.1% in London, while Germany's DAX tumbled 1.5%.

France's CAC 40 lost 2.2%, despite market relief from President Emmanuel Macron's electoral victory over far-right candidate Marine Le Pen.

The decline in Asian and European markets comes after a gloomy day for US stocks on Friday.

The Dow fell about 980 points, or 2.8%, after comments from Federal Reserve Chairman Jerome Powell about likely aggressive interest rate hikes.

The S&P 500 and the Nasdaq also fell more than 2.5% each.

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• China's capital rushes to contain 'urgent and grim' Covid-19 outbreak as Shanghai lockdown continues

Now, fears that China's Covid-19 situation could worsen are adding to the downward momentum.

On Monday, Dow futures fell 305 points, or 0.9%, while S&P 500 and Nasdaq futures fell 1%.

Beijing, China's capital home to 21 million people, began mass testing this weekend and closed residential complexes, raising concerns that tougher restrictions could be implemented.

Precisely, measures that are in line with those of other Chinese cities.

"Although some parts of China have been under restrictions longer than Shanghai, the arrival of the omicron variant in Beijing would be an ominous development," Jeffrey Halley, senior market strategist at Oanda, wrote on Monday.

They fear more protests over food shortages and lockdowns in China 0:59

"China is the second largest economy in the world and has shown no signs that it intends to live with the virus," he said. "With that in mind, the possible pressure valve will be a disruption in China's export machinery." and a crater in consumer confidence."

Oil prices slumped on Monday as concerns about faster US interest rate rises and a slowdown in China weighed on sentiment.

Futures for US oil and Brent crude, the international benchmark, fell more than 4%.

• ANALYSIS |

  Hunger and anger dominate the endless nightmare of the confinement in Shanghai, China

"It appears that China is the elephant in the room and markets feel that the country's growth slowdown could materially change the supply/demand equation in international markets," Halley said.

The pressure to contain the outbreak in Beijing comes as cases continue to rise in Shanghai.

The lockdown in Shanghai has already forced many factories to suspend production and has worsened shipping delays.

Which threatens to cause a major shock to its vast economy and put further pressure on global supply chains.

Shanghai reported more than 19,000 new COVID-19 cases and 51 deaths on Sunday.

BeijingChina lockdownCovid-19Shanghai