European and US stockmarkets fell sharply on Wednesday after France and Germany announced new national lockdown measures as coronavirus cases across Europe spiral upwards once again.
The FTSE 100 closed the day 2.5% lower at 5,583 points, while the EuroStoxx 50 fell 3.5% to 2,964 points, as Europe's two largest economies imposed fresh four-week national lockdowns in an attempt to slow the spread of the virus.
French President Emmanuel Macron announced that French residents will need a certificate to leave home, while non-essential businesses, bars and restaurants will remain closed at least until 1 December.
Although Asian markets wobbled yesterday, it was Europe that led the rout as France and Germany enacted national lockdowns lite in an attempt to control their exploding covid-19 cases."
In Germany, restaurants, bars and clubs will also be closed and residents are being advised to stay at home, while meetings between more than two households in public will be banned, though schools and kindergartens remain open for now.
The French CAC 40 index fell 3.4%, while the German DAX is down 4.2% on the worrying news, as fears across Europe grow of widespread national lockdowns.
The US stockmarket also followed suit, with its own coronavirus situation hardly under control, with the S&P 500 down 3.5% at 3,271 points, the Dow Jones 3.4% lower at 26,520 points and the Nasdaq index closing 3.7% lower at 11,005 points.
Jeffrey Halley, senior market analyst for Asia Pacific at OANDA, said: "The blue wave trade became Moody Blue overnight, as buy everything turned into sell everything.
"Although Asian markets wobbled yesterday, it was Europe that led the rout as France and Germany enacted national lockdowns lite in an attempt to control their exploding covid-19 cases.
"European equities headed south and Wall Street was all too happy to join in with Covid-19 cases ramping up in the US and any hope of a US stimulus package in November (it was previously pre-election), left blowing in the wind."
Chris Beauchamp, chief market analyst at IG, added: "In these circumstances, a UK lockdown seems not far behind, given the current direction of travel across the continent.
"Monday's price action had given strong hints that we had not seen the low yet, and today has proved the strength of that view, and for now it appears that the rush for the exits will continue for the time being.
"The impressive dive in European markets over the past few days has revealed how dire sentiment is towards this part of the world, with already weak GDP forecasts likely being hastily revised yet lower thanks to the return of lockdown policies."
This article was first published by our sister title Professional Adviser