LONDON: Stock markets around the world slid into the red on Friday as concerns about rising Covid cases weighed on sentiment.
After data showed an unexpected rise in US retail sales, Wall Street pushed higher at the open, as it signalled consumer spending will help sustain economic recovery.
However the gains didn’t last long, with Wall Street sinking into the red in morning trading.
“Covid-19 concerns still linger and the economic outlook is not as bright as it was just a few weeks ago,” said market analyst Edward Moya at trading platform Oanda.
The highly-contagious delta variant has led to surging infection rates in many parts of the world, leading authorities to reimpose certain restrictions.
In Europe, traders digested data confirming eurozone inflation had slowed in June to 1.9 percent from 2.0 percent in May, which suggested that price pressures remain elevated.
“European stocks have seen a solid run-up across the (first) quarter, but the momentum behind the rally has stalled recently,” noted Oanda analyst Sophie Griffiths.
“Strong corporate earnings data could go some way to negating the lingering Covid concerns,” she added. Sentiment was also subdued owing to dovish comments from Federal Reserve chief Jerome Powell, who reiterated the US central bank’s plans to maintain stimulus initiatives until the economy has fully recovered.
Treasury Secretary Janet Yellen meanwhile warned that inflation would remain elevated for months to come.
“I think we will have several more months of rapid inflation, so I’m not saying that this is a one-month phenomenon,” Yellen said Thursday during an interview with CNBC after US markets had closed.
However she predicted that price increases would reach “normal levels” over the medium term.