Global stocks fall on virus concern, tighter Fed policy

BEIJING (AP) — Global stock markets and Wall Street futures tumbled Monday amid concern about the latest coronavirus variant and tighter Federal Reserve policy.

London and Frankfurt opened sharply lower. Shanghai, Tokyo and Hong Kong also fell at the start of a trading week that will be shortened by Christmas. Benchmark U.S. oil fell by more than $3 per barrel.

The spread of the omicron variant has fueled fears that renewed curbs on business and travel might worsen supply chain disruptions and boost inflation.

“Omicron threatens to be the Grinch to rob Christmas,” Mizuho Bank’s Vishnu Varathan said in a report. The market “prefers safety to nasty surprises.”

In early trading, the FTSE 100 in London fell 1.7% to 7,143.60 and the DAX in Frankfurt lost 2.4% to 15,155.71. The CAC 40 in Paris sank 2% to 6,787.68.

On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average lost 1.5%.

On Friday, the S&P fell 1% as traders took money off the table after the Fed indicated it would fight inflation by speeding up the withdrawal of economic stimulus. The index is 2% below its all-time high and up 23% for the year.

The Dow lost 1.5% and the Nasdaq composite, dominated by tech stocks, slipped 0.1%.

In Asia, the Shanghai Composite Index slid 1.1% to 3,593.60 after China’s central bank trimmed a key interest rate. The bank cut its one-year Loan Prime Rate to 0.05% but left the five-year rate and its main policy rate unchanged.

The cut is a “small step toward easing” monetary policy without changing efforts to reduce debt in real estate, Larry Hu and Xinyu Ji of Macquarie said in a report. Beijing's use of multiple interest rates “is confusing, substantially muting the signal" if only one is cut, they said.

The Nikkei 225 in Tokyo sank 2.1% to...