On Monday, world stocks and oil prices plunged as fresh COVID-19 restrictions in China deepened worries about the global economic outlook.

The safe-haven dollar rallied, while the US Treasury yield curve remained deeply inverted, indicating that investors remain alert to global recession risks.

Coronavirus episodes across China are a setback to hopes for easing strict pandemic restrictions, one reason cited for a 10 per cent decline in oil prices last week and Monday’s lacklustre opening in European stocks.

On Monday, Beijing’s most populous district instructed residents to stay home as the city’s COVID case numbers increased. In contrast, at least one district in Guangzhou was locked down for five days, sending major European bourses downhill, with markets in Paris, London, and Frankfurt all opening weaker, while S&P 500 futures and Nasdaq futures tumbled 0.5 per cent.

MSCI’s broadest index of world shares dropped 0.5 per cent.