Global stocks were criticized for fears of the new COVID variant, with Dow Jones futures losing 900 points and the South African rand to a one-year low.

Jenalyn Fong
Pfizer-BioNTech COVID Vaccine.

  • Global stocks fell on Friday after a new type of COVID-19 that could be more transmissible emerged in South Africa.
  • The South African rand fell to a one-year low against the dollar, while safe havens such as gold and the Swiss franc rose.
  • Dow Jones futures fell 900 points, indicating a decline in early trading in the holiday short session later.

Global stocks fell on Friday after the emergence of a new variant of COVID-19, prompting investors to flee riskier assets, sending the South African rand to its lowest level in one year, and lifting gold and other safe havens.

In early European dealings, Dow Jones futures contracts It fell by about 900 points by 2.5%, while those on Nasdaq 100 It decreased by 1.2%. S&P 500 futures contracts It was down 2% as of 3:35 AM ET, indicating a weaker start to trading later in the day. US financial markets are closed Thursday for Thanksgiving and will trade in a shortened session on Friday.

South African scientists said Thursday DISCOVER Small numbers of a new variant of COVID-19 could prove more transmissible.

The scientists told reporters at a news conference that the variant – called B.1.1.529 – contained a “very unusual constellation” of mutations, which means the body’s immune response may not be activated and vaccines may be less effective against it. Reuters.

United kingdom Banned flights from six African countries as a response. In recent weeks, Europe has been the focus of attention with a spike in COVID-19 cases, leading to lockdowns and restrictions in Austria, Italy and other countries. Earlier this week, the World Health Organization warned that the coronavirus could claim another 700,000 victims by March.

With alarm bells sounding about the impact on the economy of another highly contagious kind, investors flocked to safe haven assets. The Swiss Franc It jumped the most against the dollar in three months, up 0.7% on the day, while Went It rose 1.2 percent to 1805 dollars an ounce.

“A new and potentially dangerous form of COVID has led to a wave of risk aversion across the markets,” said strategists at online brokerage IG in a daily note.

“Heavy losses are expected across the indices, although tech stocks have been less affected, at least so far,” they added.

The South African rand fell about 2% to its lowest level against the dollar in a year, while the yield on South African 10-year government bonds jumped 26 basis points to 9.99%, the highest level since May 2020. South African bonds are less liquid and more volatile than US Treasuries, but this was the largest one-day rise since March of this year.

Asian stocks took a hit overnight, with Hong Kong markets Hang Seng It fell 2.8%, in Tokyo Nikki The fall is 2.5%, and Shanghai boat A fall of 0.6%.

“At this point, very little is known. Spurs are often less severe so we shouldn’t rush to conclusions, but there is clearly a lot of concern about this case,” Deutsche Bank strategist Jim Reed said in an early note. .

“Suffice it to say at this point no one in the markets will have any idea which direction this is going,” he said.

European stocks were a sea of ​​red in the first few minutes of trading, with Stokes 50 by 3.6% FTSE 100 In London it fell 3.5% and Frankfurt Dax 3.9% drop.

Investor nervousness actions rose. VIX Volatility Index futures jumped nearly 13%.

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