Monday of generalized falls in the markets amid fears of new confinements in China after the detection of cases of the new variant of the most contagious covid, the omicron BA.5. Investors fear that restrictions will be reimposed that affect the Chinese economy under its “zero covid” policy and by contagion to the rest of the planet. In addition, the proposed stimulus programs are insufficient.
“This situation raises the possibility of imposing new confinements, putting the course of the economy and supply chains in trouble,” analyzes Diego Morín, from IG. The biggest falls are experienced this Monday in China itself. Hong Kong’s Hang Seng Index slumped 3%, while the mainland stocks in Shanghai and Shenzhen fell 1.3% and 1.9% respectively.
Europe has followed suit. The Ibex 35 sank almost 1.5% in the early stages, only to come back later and trade flat in the middle of the session, recovering the level of 8,000 points. The hardest hit were Ferrovial, with a decrease of 2.5%, IAG (-2.1%) and Sacyr (-2%).
In the rest of the continent, Frankfurt was the furthest behind among the main places, with a fall of 0.70% at mid-session, by half a point in Paris.
In the continental case, the energy perspectives are in doubt, with the possible total cut of Russian gas. This Monday the annual maintenance of the largest gas pipeline from Russia to Germany has begun, with the forecast that it will last a couple of weeks. There are fears that shipments will not restart, which could trigger supply problems.
The possible drop in activity is also reflected in the price of oil, which in its Brent variety fell 2% this Monday. “We can find ourselves with more negative surprises than those that seem to be discounted,” says Javier Molina, from eToro.
As a result, in the EuroStoxx 50, which fell 1%, industrialists such as BASF (-2.8%), Volkswagen (-2%) or BMW (-1.7%) suffered due to the forecast of lower consumption due to the economic contraction.
