As the new cases with Delta variant of Coronavirus are reportedly rising across the globe, stocks fall sharply today from Wall Street to Sydney over deepening pessimism.

The Guardian‘s Phillip Inman writes “The prospect of slowing global growth resulted in most stock markets across Europe experiencing significant falls, after a slide in Asia overnight that came when Indonesia reported an increase in cases and some athletes tested positive at Tokyo’s Olympic village, with the Games due to open on Friday”.

In the US, the Dow fell about 725 points Monday, a drop of 2.1%. The S&P 500 ended the day down 1.6% and the Nasdaq was 1.1% lower.

Source: CNN Business

“This was the worst day for the Dow since a 943-point drop in late October, and it was the biggest decline this year. But the blue chip market barometer has had several even bigger point plunges since the start of 2020 due to concerns about the Covid-19 pandemic,” CNN Business reports.

Peter Essele, head of investment management for Commonwealth Financial Network, told CNN Business “Fear of stagflation will be a major concern for investors if a resurgence in Covid infections causes economies to slow while consumer prices continue an upward trajectory”.

According to The Guardian, the pan-European Stoxx 600 index fell 2.3%, its lowest close in two months, with Germany’s Dax and France’s Cac bourses down 2.5%.

• Dow suffers biggest drop of the year as Delta variant fears hit Wall Street hard
• Stocks Sink And Yields Tumble As COVID-19 Fears Circle The World
• Global markets fall amid pessimism over soaring Covid-19 cases

Russ Mould, the investment director at the stockbroker AJ Bell, told The Guardian “Covid is spreading fast again and the airlines, restaurants and leisure companies may not get the strong summer trading they’ve long hoped for.”

“The big concern for the market is whether we are going to see a slowdown in the global economic recovery, and this could be the overriding force which results in a bad period for equities in the weeks ahead.”

In Asia, 10-strong Asean economic bloc covering Thailand, Singapore and the Philippines was on the brink of a resurgence of the virus after recent localised outbreaks, according to Lavanya Venkateswaran, an analyst at Mizuho Bank based in Singapore.

“The more transmissible Delta variant is delaying the recovery for the Asean economies and pushing them further into the doldrums,” Lavanya told The Guardian.

The NPR News writes “Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year”.