Equity indices across Europe opened higher but then collapsed, and had fallen by about 1 percent by the end of the morning. The Stoxx Europe 600 fell 1.2 percent, after rising as much as 1 percent, extending its losses to a sixth straight day. The index was at its lowest level since March 2021. Britain’s FTSE 100 fell 1 percent and Germany’s DAX fell 0.9 percent.
“Investors are just re-evaluating global risk,” said Bruce Pang, a Hong Kong-based analyst with China Renaissance Securities. “They want to play it safe.”
On Tuesday, government bond yields fell from their recent highs. The yield on 10-year US Treasuries fell to 3.30 percent. The day before, as stocks plummeted, yields rose to 3.36 percent, the highest level since 2011.
At the same time, cryptocurrencies are continuing their decline amid a series of market crashes. On Monday, Celsius Network, an experimental cryptocurrency bank, froze withdrawals, sending depositors into a panic. Bitcoin plunged to its lowest point since 2020. According to CoinMarketCap, it fell 7 percent early in the morning in New York City in the past 24 hours.
Investors have tried to understand what is happening in the global economy.
The World Bank issued a stark warning last week that a recession is hard to avoid for many countries. On Monday, credit rating agency Fitch lowered its 2022 forecast for global gross domestic product, or GDP, from an estimate of 3.5 percent in March to 2.9 percent. These are just the latest in a series of global economic downturns, as Russia’s ongoing war in Ukraine has already strained global supply chains, disrupts trade and drives up prices of oil, wheat, metals and other essential commodities.
As inflation rises, central banks around the world, from Australia to Canada, have moved to raise rates. On Thursday, the Bank of England is expected to raise its benchmark interest rate for the fifth consecutive meeting. Last week, the European Central Bank said it would raise its rates next month for the first time in more than a decade.
