Global stocks, oil prices slip as rising COVID-19 cases prompt Chinese lockdowns

By Chibuike Oguh

NEW YORK (Reuters) – Global stocks and oil prices slipped on Monday as a spike in COVID-19 cases and newly recorded deaths in China prompted authorities in the world’s second-largest economy to reinstate lockdowns.

Beijing’s most populous district urged residents to stay at home on Monday as the city’s COVID case numbers rose, while at least one district in Guangzhou was locked down for five days.

“It looked like zero COVID was moving in the right direction and everyone was excited but the Chinese government is taking some strong action and in the short term there’s going to be fits and starts,” said Thomas Hayes, chairman of Great Hill Capital in New York.

MSCI’s broadest index of world shares fell 0.91%, while European stocks were down 0.8%.

On Wall Street, all three major indexes were trading lower, led by a selloff in technology, energy and consumer discretionary stocks.

The Dow Jones Industrial Average fell 0.24% to 33,664.66, the S&P 500 lost 0.49% to 3,945.76 and the Nasdaq Composite dropped 0.83% to 11,053.73.

Oil prices dropped to their lowest level since early January on concerns of lower Chinese fuel demand owing to the COVID-19 lockdowns as well as reports that Saudi Arabia and other OPEC members are holding talks on a potential output increase.

(Reporting by Chibuike Oguh in New York, editing by Deepa Babington)