Virus surge to throw a damper on markets

Gains to be cut short as rise in Covid-19 cases once again becomes worrisome

After new infections surged in various parts of the world over the weekend, markets will be pressured this week, snuffing any hope among investors of a quick rebound post lockdowns.

A renewed spike in virus cases in several parts of North and South America, Australia, Japan and India have prompted analysts to caution of an even further slowdown in economic recoveries. Global markets have up until now been trying to regain their footing, and largely managed to do so, as stocks mostly ended higher last week and the weeks before.

This was partly on the back of positive macroeconomic data coming out of Germany and China, which renewed optimism for most financial markets and investors alike.

The gains are expected to be cut short this week as a sharp rise in Covid-19 cases has once again become a cause for worry.

North and South America have seen a sharp spike in cases, with the region on Saturday reporting a record number of new cases. Several cities in the US are seeing a record number of cases and some cities in India have extended their lockdown over the weekend.

US gains

India is now widely expected to cross Russia and emerge as the nation with the third largest reported infections around the world, after recording a record number of infections on Saturday. In Russia, however, new cases have dropped for a third week in a row. Despite the daily coronavirus case count topping 50,000 for the first time in the US, stocks have been on an upward trajectory, as has been the trend the past few weeks.