Shipping stocks took a hit in Thursday trading as investors baulked at signs the US government will taper off stimulus efforts, and continued fears over the spread of the Covid-19 Delta variant.
Despite early signs the jitters might tank the broader stock market, most indexes were rebounding by midday and losses held to a minimum.
Shipping names were not as fortunate, as shares dipped across operating sectors.
In dry bulk, Connecticut owner Eagle Bulk Shipping closed down nearly 7% to $41.61 and sector giant Star Bulk Carriers stumbled 4% to $20.46.
In the red-hot containership sector, Danaos fell nearly 5% before closing at $72.53, a 3% dip. Seaspan Corp parent Atlas bled 4% to $13.659 and Israeli liner operator Zim shed 4% to $45.02.
And in tankers, bellwether Frontline ended the session at $7.28, a 3% dip. Euronav shed 2% in New York to reach $7.97 and Scorpio Tankers lost 4% to close at $14.45.
In other markets, DS Norden shares fell more than 9% in Denmark, while Samudera Shipping sank nearly 7% in Singapore.
Jefferies lead shipping analyst Randy Giveans described a largely irrational investor reaction to the negative catalysts.
"Investors are myopically focused on concerns about the Fed tapering and Delta variants. Nobody cares about fundamentals or rates right now, they're just having flashbacks of March 2020," Giveans told TradeWinds on Thursday.
"Also, it is a lot easier and safer for a portfolio manager to sell from the beach in August than to buy. 'Sell now and we will sort it out in September' has probably been heard with waves in the background."
Giveans expressed confidence, however, that the anxiety reflected more of a short-term blip than anything enduring.
"All that being said, if your time horizon is more than a few weeks and you look out a few months, I strongly believe most shipping stocks will be much higher than currently, and obviously I like some more than others," he said.
Investors were reacting to minutes of the US Federal Reserve's July meeting that suggested a bond asset-purchase programme launched at the outset of the Covid-19 outbreak could begin to wind down later this year rather than in 2022 as many had expected.
There is also uncertainty over whether the spread of the Covid-19 Delta variant could cause further lockdowns despite progress made in vaccinating much of the population.
The Dow Jones Industrial Average remained down at the end of Thursday afternoon trading, but only about 0.19% to 34,894. The small-cap Russell 2000 index also was down about 1%, but the S&P 500 was up a faction and the Nasdaq 0.25% to the good.
