European stocks slide as Delta fears offsets growth hopes

Bitcoin has come under pressure after El Salvador became the first country to use it as legal tender, with the official digital wallet suffering technical problems. The rollout has also met with protests on fears it could fan inflation. ©AFP

London (AFP) - European stock markets extended losses Wednesday as worries about the impact of the Delta coronavirus variant on the global economic recovery tempered investor appetite.

In Asia, hopes for more Japanese stimulus helped Tokyo extend a recent rally.

While Tuesday saw Wall Street's Nasdaq clock yet another record with a small gain, the S&P 500 and Dow indices ended with a whimper as they reopened after a long weekend.

"Fears of slowing growth trimmed recent gains on...major indices, with expectations being revised to incorporate the effect that the Delta variant may be having on the performance of corporates in the current third quarter," noted Richard Hunter, head of markets at Interactive Investor.

Bitcoin recovered, sitting at around $46,000 after seeing wild fluctuations on Tuesday as El Salvador became the first country to use it as legal tender.

The unit had plunged by almost a fifth to as low as $43,000 after a technical issue hit the official digital wallet on vast consumer demand, though that was later resolved.

Traders are keeping a close eye on the fast-spreading Delta strain, which is sending infection rates spiking around the world and forcing some governments to reimpose containment measures or lockdowns, raising concerns about the economic recovery.

Still, observers say the general mood is positive for the future, with hopes that the US Federal Reserve will delay tapering its monetary policy until the end of the year lending support.

"Localised setbacks in combating the virus have the potential to contribute to market volatility and slow the economic rebound in selected countries," noted Mark Haefele at UBS Group AG.

"But we continue to see broad progress in curbing the pandemic and returning to economic normality."

Tokyo's Nikkei 225 ended above 30,000 points for the first time since April after Japan's Prime Minister Yoshihide Suga last week said he would stand down, raising hopes his successor will introduce fresh economic stimulus.

On Wednesday, one of the front-runners, Fumio Kishida, pledged to push for trillions of yen in investment if he takes the post.

Data showing growth in the second quarter was better than first thought added to the positive vibes in Japan.

The Nikkei has risen around five percent since the Suga news broke, putting the index on course for a three-decade high.

Key figures around 1100 GMT

London - FTSE 100: DOWN 0.5 percent at 7,111.93 points

Frankfurt - DAX 30: DOWN 0.8 percent at 15,720.01

Paris - CAC 40: DOWN 0.5 percent at 6,695.71

EURO STOXX 50: DOWN 0.6 percent at 4,200.55

Tokyo - Nikkei 225: UP 0.9 percent at 30,181.21 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 26,320.93 (close)

Shanghai - Composite: FLAT at 3,675.19 (close)

New York - Dow: DOWN 0.8 percent at 35,100.00 (close)

Dollar/yen: DOWN at 110.25 yen from 110.30 yen at 2050 GMT

Pound/dollar: DOWN at $1.3764 from $1.3786

Euro/dollar: DOWN at $1.1817 from $1.1847

Euro/pound: DOWN at 85.84 pence from 85.90 pence

Brent North Sea crude: UP 1.1 percent at $72.49 per barrel

West Texas Intermediate: UP 1.4 percent at $69.27 per barrel

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