Europe’s stock markets went down, and China’s problems with COVID made people feel bad.
On Thursday, European stock markets fell, which was the same thing that happened on Wall Street the night before. Investors are still thinking about the rising number of COVID cases in China and the bad economic news going into the new year.
At 3:25 p.m. ET (8:25 p.m. GMT), the DAX index in Germany was down 0.3%, the CAC 40 in France was down 0.4%, and the FTSE 100 in the U.K. was down 0.6%.
European stocks have followed Wall Street’s weak close on Wednesday, with the tech-heavy Nasdaq Composite hitting its lowest close since the bear market started in November 2021.
The news that the U.S. will start requiring airline passengers coming from China to show a negative COVID test result on January 5 has made people feel bad. Beijing is struggling with a surge of cases after almost all pandemic restrictions were quickly lifted.
Italy will be the first country in Europe to be hit hard by COVID in early 2020. The country has also made it mandatory for all passengers coming from China to take a quick test, which is likely to set a precedent for the rest of Europe.
Related: Asian markets decline as investors grow apprehensive due to the COVID spike in China.
Reports of new Russian missile attacks on several Ukrainian cities, including the capital Kyiv, early Thursday added to the bad mood. The war is still going on.
Also, investors are still worried about the possibility of high inflation, slowing economic growth, and the European Central Bank continuing to tighten monetary policy into the new year.
Klaas Knot, president of the Dutch central bank, said earlier this week that with five policy meetings between now and July 2023, the ECB would be able to raise interest rates by half a percentage point at a “pretty good pace” before borrowing costs reached their peak in the summer. This was reported by the Financial Times.
There isn’t much important economic data to look at in the region, but Spanish retail sales fell 0.6% year over year in November after rising 1.0% the month before.
On Wednesday, oil prices went down because of a rise in COVID cases in China, which is the biggest importer of crude oil in the world. This made it less likely that demand would go up from this important source.
According to data from the American Petroleum Institute, crude oil stocks in the U.S. fell by 1.3 million barrels in the week ending December 23. This was less than expected.
In the afternoon, the Energy Information Administration, which is part of the U.S. government, will give out the official weekly numbers.
By 3:25 ET, U.S. crude futures were down 1.7% to $77.59 per barrel, and the Brent contract was down 1.6% to $82.62 per barrel.
Also, gold futures went up 0.1% to $1,816.85/oz, and EUR/USD went up 0.3% to 1.0638.