European stock markets slump to six month low, US stocks crashed
European stock markets fell to the lowest level in the last six months as the second coronavirus wave has been forcing governments to introduce new business restrictions. German DAX index plunged more than 4% on Wednesday and extended the downside into Thursday trading.
European stock markets are heading for the largest weekly loss in months.
Wall Street has also posted more than a 3.5% drop on Wednesday due to virus and stimulus concerns. Donald Trump said the stimulus package is not possible ahead of elections.
Coronavirus concerns are rattling European stock markets
Coronavirus cases and deaths have been increasing at a robust pace in the European Union. France has introduced a new country-wide lockdown to stop the virus spread. The lockdown will continue until the end of the next month.
Meanwhile, the new study shows that almost 100,000 people in the United Kingdom are catching virus infections daily. The official report indicated 34,000 daily virus infections on Wednesday, with more than 300 deaths.
The situation is not much different in other parts of the eurozone. Germany, the economic hub of the eurozone, also announced to close bars, gyms, and restaurants to stop the virus spread.
“We are deep in the second wave. I think that this year’s Christmas will be a different Christmas,” European Commission President Ursula von der Leyen said.
US stocks crashed on stimulus and virus worries
US stocks crashed on Wednesday as all three major indices reported a more than 3.5% decline in Wednesday trading. The selloff is extending into Thursday trading because investors believe lockdowns in the eurozone could create a massive impact on the global economy.
Oil prices suffered major losses in the past few days amid prospects for slower demand. US crude oil price is now hovering around $37 a barrel. Market analysts expect more downside as lockdowns are likely to slow oil demand.