Xinhua News Agency, Beijing, November 27th
Xinhua News Agency reporter Sun Xiaoling Shen Zhonghao
Affected by multiple factors such as reports of new variants of the new coronavirus in many countries, the three major European stock markets plummeted across the board on the 26th. Analysts believe that the new mutant virus will further aggravate supply chain tensions, affect the monetary policies of relevant countries, and make the prospects for European economic recovery even more tortuous.
On the 26th, the London Stock Market “Financial Times” 100 stocks average price index closed at 7044.03 points, down 266.34 points or 3.64% from the previous trading day. The CAC40 index of the Paris stock market in France closed at 679.73 points, down 336.14 points or 4.75% from the previous trading day. The DAX index of the Frankfurt Stock Exchange in Germany plummeted 660.94 points, or 4.15%, to close at 15257.04 points.
The latest report from the Oxford Institute for Economic Research, a British think tank, stated that the new mutant virus “has obvious immune evasion and spreads faster than the Delta strain. This shocked the market and cast a shadow on the outlook for British monetary policy.”
The report said that although it is too early to determine how serious the threat posed by the new mutant virus is, it has “brought trouble” to the Bank of England’s Monetary Policy Committee’s December interest rate decision.
Ulrich Cartel, chief economist of Deka Bank in Germany, believes that the emergence of a new mutant virus is very bad news for the financial market, which means that many countries in the world may take bans again.
Emanuel Co, head of the European stock strategy department of Barclays Bank, believes that the new mutant strain will cause turbulence in the stock market and make the prospects for economic recovery full of uncertainty. The key at present is whether the vaccine is still effective against the mutant strain.
The number of infected people in many European countries has recently increased rapidly, and some countries have been forced to take emergency bans again. The emergence of the new mutant virus has made the continuously disrupted European economic recovery “exacerbated” and may further aggravate the supply chain shortage.
The British business group Wine and Spirits Trade Association recently issued a statement saying that due to factors such as rising costs and chaotic supply chains, the current processing time for imported goods is several times longer than a year ago. The statement called on the British government to take “urgent action” against the shortage of heavy truck drivers and freight disruptions to avoid a shortage of alcohol during the Christmas period.
Capital International Macroeconomic Consulting Economist Neil Schilling said that supply chain issues have already “stretched” the economy, and the new mutant virus may make the current labor shortage worse. The threat of a new mutant virus may cause central banks to postpone interest rate hike plans until the situation becomes clearer.
