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Global economic growth is beginning to show signs of fatigue while many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into some form of lockdown. The spectre of elevated inflation, which the market has long feared, is also haunting investors.

·         Major Asia markets fall more than 1%; oil prices slip after OPEC and allies reach deal

Shares in Asia-Pacific slipped on Monday, as oil prices fell after OPEC and its allies reached a deal.

South Korea’s Kospi closed 1% lower at 3,244.04.

Australian stocks also declined as the S&P/ASX 200 dropped 0.85% to close at 7,286.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.32%.

  

·         Financials weigh down China shares, tech slump hits Hang Seng

China’s main stock indexes fell on Monday, weighed down by financials, while Hong Kong’s benchmark Hang Seng index slipped on pressure from Chinese tech giants as Beijing continues its regulatory clampdown on monopolistic practices.

At the midday break, the Shanghai Composite index was down 0.31% at 3,528.16 points.

Shenzhen component rose 0.138% to 14,992.90.

China’s blue-chip CSI300 index was down 0.19%, with its financial sector sub-index lower 0.97%, the consumer staples sector down 0.36% and the real estate index down 2.21%.

Chinese H-shares listed in Hong Kong fell 1.66% to 9,984.08, while the Hang Seng Index was down 1.59% at 27,558.42.

 

·         Japanese shares drop on worries around Delta Variant, Tokyo 2020

Japanese shares ended lower on Monday for a fourth straight session, as sentiment was hit by worries over the spread of the highly contagious Delta variant and that the Tokyo 2020 Olympics could worsen the health crisis.

The Nikkei share average fell 1.25% to 27,652.74, falling below a major support level of its 200-day moving average of 27,672 for the first time since early last year.

“The 200-day average is an important technical level. A fall below that could possibly lead to a fall to around 25,500,” said Nobuhiko Kuramochi, a senior strategist at Mizuho Securities.

 

·         European markets drop 1% as investors monitor virus, digest OPEC deal

European stocks moved sharply lower on Monday as markets digested the latest OPEC + announcement regarding oil production, and continued to brood on inflation and rising Covid-19 cases.

The pan-European Stoxx 600 slid 1.2% in early trade, with travel and leisure stocks dropping 2.5% to lead losses as all sectors and major bourses slid into negative territory.

European markets followed their counterparts in Asia Pacific lower at the start of the session, as investors reacted to the news that OPEC and its allies (a group known as OPEC+) reached a deal on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022. Coordinated increases in oil supply from the group will start in August, OPEC said in a statement.

The development comes after Brent has surged more than 40% so far in 2021, with demand for crude rising as the global economy recovers from the pandemic.

 

·         Dow futures drop more than 100 points after major averages post first negative week in four

U.S. stock index futures were lower during overnight trading on Sunday, after the major averages posted their first negative week in four.