The continued increase in the number of new cases of coronavirus infection, coupled with a further escalation in US-China relations, caused a downturn in European financial markets.
London’s FTSE index fell 0.8 percent on Wednesday, the Paris CAC-40 fell 1.1 percent, and Frankfurt’s DAX fell 0.4 percent.
Investors were alarmed by the unexpected order of the US State Department to close the Chinese Consulate in Houston, Texas. Relations between the world’s two largest economies have steadily deteriorated in recent months due to disagreements in areas such as trade, technology, and the new national security law in Hong Kong.
Asian markets were mixed on Wednesday, with Japan’s Nikkei index losing 0.5 percent, Hong Kong’s Hang Seng closing down 2.2 percent, and the Shanghai Composite adding 0.3 percent.
Australia’s S & P/ASX index fell 1.2 percent after reports of a jump in new cases of coronavirus infection in the southern state of Victoria, where Australia’s second-largest city, Melbourne, is located. The KOSPI index in South Korea fell but was little changed in percentage terms, Taiwan’s TSEC index rose 0.6 percent, and Mumbai’s Sensex in Mumbai fell 0.1 percent.
The lack of progress in the discussion about a new financial aid package for the millions of Americans left out of work by the pandemic is also causing concern in the markets.
Oil markets are also down, with US crude oil trading at $ 41.36 a barrel, down 1.3 percent, and Brent crude oil trading at $ 43.82 a barrel, down 1.1 percent.