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NEW YORK (AFP) – Global stock markets suffered heavy losses on Monday (September 21) as investors reacted to mounting fears of a second wave of coronavirus and the dwindling odds of another US stimulus bill to as partisanship intensifies ahead of presidential elections.
Crude oil prices tumbled on expectations of lower demand just as more supply became available from Libya, traders said.
The banking sector was also affected by an international media investigation that claimed that massive sums of supposedly dirty money had flowed for years through some of the world’s largest banks.
London shares fell 3.4 percent after Health Minister Matt Hancock warned Britain’s coronavirus crisis was at a “tipping point”, fueling expectations of more restrictions aimed at curbing the crisis. Covid-19, as government experts said the cases could multiply.
“Virus fears have haunted investors again today as concerns mount that the consumer-driven recovery will fail if the closures are reintroduced,” said Fawad Razaqzada, analyst at ThinkMarkets.
“Stocks have sunk, the dollar has risen and the pound has been hit,” he added.
Wall Street also had a losing day, although stocks rebounded from session lows in an apparent bargain hunt.
The Dow Jones Industrial Average ended at 27,147.70, down 1.8 percent or about 510 points, but more than 400 points above the session lows.
Hopes for another round of US stimulus spending were hurt by the death of US Supreme Court Justice Ruth Bader Ginsburg, which has sharpened already significant partisan differences in Washington ahead of the US presidential elections. United on November 3.
Ginsburg’s death “means that the political scene now looks more hostile, diminishing the possibility of a stimulus deal being made,” TD Ameritrade’s JJ Kinahan said in a note.
‘FEAR VIRUS’
Russ Mold of online broker AJ Bell added that “travel stocks again faced serious turmoil amid mounting fears about new (government) restrictions.” Most of the Asian stocks had already fallen dramatically earlier in the day.
Shares of major banks plummeted after BuzzFeed News and the International Consortium of Investigative Journalists published findings about dirty money allegedly flowing through the banking system.
“Profits from the deadly drug wars, embezzled fortunes from developing countries, and hard-earned savings stolen in a Ponzi scheme were allowed to flow into and out of these financial institutions, despite warnings from the employees of the banks, “according to the investigation.
The banks responded that they have been working for several years with national regulators to address many of the issues raised in the report.
In addition, the industry noted that law enforcement agencies sometimes request banks to maintain ongoing customer relationships to support further investigations.
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