The weekend saw sharp increases in COVID-19 cases in the west and heightened restrictions introduced across much of Europe.
The US reported its highest ever daily total of new COVID-19 cases on Friday, hitting 83,757. The daily tally was almost matched on Saturday.
France recorded a new daily case high on Sunday, announcing 52,010 positive results recorded in the previous 24 hours. A 9pm curfew covering two thirds of the country came into effect on Friday night.
Italy and Spain also announced tighter restrictions on Sunday, including business closures and curfews. A state of emergency has been declared in Spain.
Stock markets across Europe fell sharply on Monday morning. The FTSE 100 (^FTSE) opened down 1.1% in London, the DAX (^GDAXI) dropped 2.7% in Frankfurt and the CAC 40 (^FCHI) fell 1.4% in Pairs. In Milan, the FTSE MIB (FTSEMIB.MI) dropped 1.5%, while the IBEX (^IBEX) shed 1% in Madrid.
“The latest virus news and stimulus headlines has seen S&P 500 futures trade down,” said Jim Reid, a senior strategist at Deutsche Bank.
Stimulus talks continue to drag on in Washington, with little sign that a deal will be reached before next week’s US election.
Investors remain keenly interested in next week’s vote, however, polls over the weekend did not suggest any major change in the race. Democratic candidate Joe Biden retains a strong lead over US President Donald Trump.
Asian markets were mixed overnight. Japan’s Nikkei (^N225) closed flat and the Shanghai Composite (000001.SS) lost 0.8%. The KOSPI (^KOSPI) gained 0.5% in South Korea, the Hong Kong Hang Seng (^HSI) rallied half a percent, and the Shenzen Component (399001.SZ) rose 0.5% in China.