Germany’s share market has dived 3 per cent. (Reuters: Daniel Munoz)
In short:
Stock markets across Europe are tumbling, with Germany’s share market diving 4 per cent.
It follows a surge in the price of oil in response to the closure of the Strait of Hormuz.
What’s next?
There are concerns a long, drawn-out war in the Middle East will seriously damage the global economy.
Stock markets across Europe are enduring heavy selling, with Germany’s share market diving 4 per cent during mid-morning trade.
It follows a surge in the price of oil as Europe woke up to news that the Strait of Hormuz had been closed to shipping.
About 20 per cent of the world’s oil supplies traverse through the strait.
Brent crude futures is trading above $82 per barrel (at 10pm AEDT) and benchmark European gas is up about 25 per cent to its highest in over a year.
It has stoked worries about inflation at a time when Europe’s central banks looked to have price rises under control following the post-COVID spike.
The pan-continental STOXX 600 index is down 2.5 per cent in early trade after sliding 1.7 per cent the day before.
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There is little place to shelter anywhere, with all the major sectors in the red.
Breadth is overwhelmingly negative, with declining stocks outnumbering advancing stocks by about 25 to 1.
There are also concerns that a long, drawn-out war in the Middle East will seriously damage the global economy.
“[The] first blush ‘buy the dip’ effects are fading as global investors factor in the inflationary impact of higher energy prices for longer,” MooMoo Australia’s Michael McCarthy told the ABC.
The Australian dollar has been caught in the market rout, shedding over 1 per cent to 70 US cents.
