Global stock markets collapse as new COVID variable frightens investors
Stock markets around the world fell on Friday, heading for their biggest weekly drop in nearly two months, as a new type of coronavirus raised fears.
In Europe, the FTSE 100 Index (^ Ftsy) is down 3.4% after the opening in London, with only two items in the green, while the CAC is down (^FCHI(Down by 3.3% in Paris, Frankfurt DAX)^ JDAXY) was 3.1% lower.
This comes as a new, more transmissible variant of COVID-19 that has been identified in South Africa, and has also been detected in Hong Kong.
The B.1.1529 strain has been reported to contain up to 30 identified mutations, prompting officials from the World Health Organization (WHO) to call an emergency meeting to discuss what the vaccine’s efficacy means as well as other treatments.
The UK government has already implemented a ban on flights from six African countries over concerns about infection rates, and the European Union is set to follow suit.
“Currently, the number of cases is understood to be small, but given the low levels of liquidity in trading in Asia as a result of the US holiday, the reaction appears to have been very large, with a surge in bonds, which lowered yields,” said Michael Hewson of CMC. Markets: “And gold is higher.”
Rising infections have already begun to sweep across Europe in recent weeks, with Germany suffering from a resurgence of the virus, and Italy announcing stricter restrictions, as well as the Czech Republic and Portugal in the past two days.
This caused the Euro to post a third consecutive weekly decline, trading again at levels last seen in the summer of 2020. Travel and leisure stocks suffered their biggest loss on Friday.
“The absence of leadership from Wall Street, which was shut down for the Thanksgiving holiday, has got investors thinking about the latest strain of the Coronavirus variant that has led to somewhat of Black Friday,” said Richard Hunter, head of markets at Interactive Investor.
Asian stocks fell overnight, with the Nikkei (^N225(closed 2.5% lower in Japan while the Hang Seng Index)^ HSI(It is down 2.6% in Hong Kong, and the Shanghai Composite Index)000001.SS) decreased 0.6%,
The South African rand fell 1% in early trade to its lowest level in a year, while the risk-sensitive Australian and New Zealand dollars fell to their lowest levels in three months. Brent crude futures contractsBZ = F.It also fell 4.8% to below $80 (£60) a barrel on the news.
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