European markets fell on Monday as a string of countries announced they would temporarily halt the use of the Oxford-AstraZeneca (AZN.L) vaccine amid blood clotting fears.
The French and German governments said they would temporarily halt the use of the vaccine as a precaution.
Germany's health minister said the decision was taken on the advice of the countries national vaccine regulator, the Paul Ehrlich Institute, which called for further investigation into seven reported cases of clots in the brains of people who had been vaccinated.
“Today’s decision is a purely precautionary measure,” Jens Spahn said.
French President Emmanuel Macron said his country would likewise suspend shots at least until Tuesday afternoon, when the European Union’s drug regulatory agency will weigh in on the vaccine. He said France hopes to resume using the formula soon.
Stock initially opened with a positive start on Monday before retreating into the afternoon. Britain's FTSE 100 (^FTSE) fell from its session highs, to close 0.17% lower while France's CAC (^FCHI) slipped 0.20% and Germany's DAX (^GDAXI) was 0.26% down.
The National Immunisation Advisory Committee (NIAC) recommended the move on Sunday after a review from the Norwegian Medicines Agency showed four new cases of "serious blood clotting in adults" had occurred following inoculations.
However, the Medicines and Healthcare products Regulatory Agency (MHRA) said evidence "does not suggest" the jab causes clots, while the World Health Organisation (WHO) said there was no link between the jab and an increased risk of developing a clot, and no reason to stop using it.
The Netherlands, Bulgaria, Denmark and Norway are also among the countries that have paused its use, as well as Thailand, Iceland and Congo.
"News that an increasing number of European nations are temporarily suspending use of the AstraZeneca vaccine changed the colour of trading on Monday," Connor Campbell of SpreadEx said.
"Though not enough to cause a sell-off – in part because the World Health Organisation has stressed there is no correlation between the vaccine and said cases – this update did prompt the markets to swing from green to red in fairly uniform fashion."
Last week, the Dow, S&P 500 and Russell 2000 hit record highs, with the gains found in sectors left behind by the huge tech rally that has helped support most of the move higher in US equities over the last few years.
US bond yields hovered near a 13-month peak on Monday as investors bet US economic growth will accelerate after the $1.9tn (£1.36tn) stimulus bill President Joe Biden signed last week.
Michael Hewson of CMC Markets said: “Rising bond yields, with the US 10-year yield now above 1.62%, and at a one year high, have served to cast doubt about the longer-term sustainability of some of the more expensive areas of the US market, and through we did see the Nasdaq break a run of three successive weeks of losses, the continued rise in US long term yields is prompting some anxiety about sky high valuations across a number of areas.”
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It came as data showed that factory production and consumer spending in China both surged at the start of this year.
Industrial production in the world’s second largest economy climbed 35.1% year-on-year in the first two months of 2021 - the biggest bounce recorded in decades. Meanwhile, retail sales grew 33.8% in the period, compared to a year ago.
Urban unemployment in China rose to 5.5% in February, from 5.2% in December, while fixed asset investment growth came in below forecasts - jumping 35% year-on-year, versus forecasts of a 40% jump.
Mould said: “The scale of China’s recovery from the pandemic, which beat analysts’ expectations, offers an imperfect trailer for what might happen when there is a full reopening in the West. Those concerns over rising prices haven’t disappeared entirely though, with bond yields still elevated and sentiment remains fragile."
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