Global stocks fall on Delta variant gloom

Global stock markets were broadly lower Tuesday as investors fretted that the resurgent Delta coronavirus variant may put the brakes on the global economic recovery.

Oil prices dropped for a fourth straight session as economic strains in China impact on the demand outlook for crude and other commodities, traders said. US stocks came off record highs at the open after data showed US retail sales fell 1.1 per cent in July.

London's FTSE 100 stocks index was a rare riser, up slightly in afternoon deals after official data revealed a dip in UK unemployment during the second quarter as its economy began to reopen from lockdown.

Separate figures confirmed that the eurozone economy rebounded 2.0 per cent in the April-June period.

On the corporate front, shares in BHP surged around seven percent in London after the miner announced a multi-billion-dollar deal to sell its liquid fossil fuels business as it seeks to transition to cleaner energy.

BHP also logged its highest annual profit in almost a decade on runaway copper and iron ore prices.On Wall Street Monday, the Dow and S&P 500 stocks indices registered record-high closes for a fifth straight session.

This despite the outlook for the global recovery hit by Chinese data this week showing retail sales and industrial production slowing in July.

A rapid growth recovery in China, the world's second biggest economy after the US, has been threatened by renewed localised virus lockdowns and extensive travel restrictions.

The drop in US retail sales may reflect the knock-on effects Covid closures and disruptions are having on economies, as it was driven by a 4.3 per cent drop in car sales.

The auto industry has been hammered by a shortage of computer chips amid a boom in demand for electronics as more people stayed home during coronavirus lockdowns, prompting automakers to slow or even stop production at some factories.

"The key takeaway from the report is that there were declines in most retail categories," said market analyst Patrick O'Hare at Briefing.com.

JJ Kinahan at TD Ameritrade said that when cars are excluded the drop is only 0.4 per cent.

"Still, when you match that up with a bunch of negative data reads lately including last Friday's sentiment print, it paints a picture of consumers possibly being less willing to spend," he said.

On Friday data was released showing that the University of Michigan's consumer sentiment index had fallen in August to its lowest level since 2011.

"Analysts immediately blamed the Delta variant," added Kinahan.