* Chart: Overall asset performance tmsnrt.rs/2yaDPgn
* Chart: World currency exchange rates tmsnrt.rs/2egbfVh
* MSCI ACWI down 0.1%
* Dollar up, yen up, euro down
* American holiday markets
LONDON, Jan 18 (Reuters) – Global stock markets plunged on Monday as rising COVID-19 cases offset investors’ hopes of a quick economic recovery, even after data show that the Chinese economy bounced faster than expected in the fourth quarter of 2020.
European shares measured by the STOXX 600 index traded 0.1% lower than since 1134 GMT, following failed merger negotiations between French retailer Carrefour and Alimentation Couche-Tard. The continent’s 50 largest stocks fell 0.3%
The German DAX was trading flat, the French CAC 40 index fell 0.1% and Italy’s FTSE MIB index gained 0.1%. Britain’s FTSE 100 index fell 0.3%.
In Asia, Chinese blue chips rose 1.1% after the economy was reported to grow 6.5% in the fourth quarter, a year earlier, beating forecasts by 6.1%.
December industrial production also exceeded estimates, although retail sales lost expectations.
“The recovery in domestic demand still does not have solid support,” said Lauri Hälikkä, SEB’s fixed income and FX strategist. “Sporadic virus outbreaks have intensified downside risks in the short term.”
China reported more than 100 new cases of COVID-19 for the sixth day in a row, with rising infections in the Northeast fueling concern about another wave as hundreds of millions of people travel on holiday. lunar new year.
New difficult controls in Gongzhuling City, Jilin Province, which has a population of about one million people, brings the total number of people closed to more than 29 million.
Hallika said the impact of recent regional closures and massive tests is likely to be limited and short-lived.
The recovery in China was a stark contrast to the United States and Europe, where the spread of coronavirus has affected consumer spending, underscored by sad U.S. retail sales reported on Friday.
Poor information on U.S. consumer spending last week helped the Treasury reduce some of the recent strong losses and 10-year yields traded at 1.097%, below last week’s high (1.187% ).
At the same time, the more sober mood boosted the US dollar of safe haven, achieving a deeply short bear market. Speculators raised their short net position in dollars to the largest since May 2011, the week ended January 12th.
Doubts are also evident about how much of the stimulus package of U.S. President-elect Joe Biden will come through Congress in the face of Republican opposition, and the risk of further violence in his inauguration on Wednesday.
Elsewhere in Asian markets, the Japanese Nikkei fell 1% and exceeded the 30-year high.
The MSCI ‘All Country World index, which tracks the actions of 49 countries, fell 0.1%, for a second session, after hitting record highs last week.
The future E-Mini of the S&P 500 will be traded, although Wall Street will remain closed on Monday for holidays.
BUBBLE?
Investors have debated the question of whether markets are heading for a bubble.
In a monthly letter to clients last week, Mark Haefele, investment director at UBS Global Wealth Management, said there were all the prerequisites for a bubble.
“Financing costs are at record lows, new entrants are being attracted to markets and the combination of high cumulative savings and low prospective returns on traditional assets creates both the means and the desire to engage in speculative activities,” he said. say, warning that in the coming months, investors will have to pay special attention to the “risks of monetary policy reversal, rising equity valuations and the post-pandemic recovery rate.”
Haefele, however, said that while he sees speculation, the broader equity market is not in a bubble.
The Bitcoin cryptocurrency traded up 1.2% and grossed $ 36,236.
The dollar index was confirmed at 90,908, the strongest since Dec. 21, and far from its recent 2-1 / 2 low at 89,206.
The euro had retreated to $ 1.2070, the lowest since December 2, while the dollar gained 0.1% against the yen at 103.78 and well above the recent low of 102 , 57.
The Canadian dollar fell to $ 1.2792 per dollar after Reuters reported that Biden planned to revoke the permit for the Keystone XL pipeline.
Biden’s election for Treasury Secretary Janet Yellen is expected to rule out the search for a weaker dollar when he declares on Tuesday, the Wall Street Journal reported.
Gold prices gained 0.4% to $ 1,833 an ounce, compared to their January high of $ 1,959.
Crude oil prices fell in profit, as the spread of ever-narrower closures globally would affect demand, a drop that also dragged the Russian ruble to 1.1%.
Brent crude futures fell 0.1% to $ 55.60 a barrel, while US crude gained 0.1% to $ 52.43.
Reports by Ritvik Carvalho; additional reports from Wayne Cole in Sydney; Edited by Angus MacSwan and Hugh Lawson