Stocks, oil tumble on virus variant fears, safe havens gain

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  • European shares down 2.7%; S&P 500 futures down 1.8%
  • U.S. crude falls 5.7%
  • Bund yields down 6.2 bps

LONDON, Nov 26 (Reuters) – Global shares tumbled on Friday and oil fell under $80 a barrel after news of a probably vaccine-resistant coronavirus variant despatched buyers scurrying to the security of bonds, the yen and the Swiss franc.

Little is thought of the variant, detected in South Africa, Botswana and Hong Kong, however scientists say it has an uncommon mixture of mutations, could possibly evade immune responses and might be extra transmissible. learn extra

British authorities suppose it’s the most important variant to this point and have hurried to impose journey restrictions on southern Africa, as did Japan, the Czech Republic and Italy on Friday. learn extra [nL8N2SH1HS

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The European Union additionally mentioned it aimed to halt air journey from the area.

“Markets have been quite complacent about the pandemic for a while, partly because economies have been able to withstand the impact of selective lockdown measures. But we can see from the new emergency brakes on air travel that there will be ramifications for the price of oil,” mentioned Chris Scicluna, head of financial analysis at Daiwa.

The World Health Organization is convening an specialists’ assembly later on Friday to judge whether or not the brand new variant is a “variant of concern.” learn extra

Global shares (.MIWD00000PUS) fell 0.8% and have been on course for his or her worst week since early October.

European shares (.STOXX) plunged 2.7%, on observe for his or her worst day since September 2020, with journey and leisure shares notably badly hit.

Germany’s DAX (.GDAXI) sank 3% and Britain’s FTSE 100 (.FTSE) fell 2.7% to its lowest in additional than a month.

MSCI’s index of Asian shares outdoors Japan (.MIAPJ0000PUS) fell 2.2%, its sharpest drop since August. Casino and beverage shares have been hammered in Hong Kong, whereas journey shares dropped in Sydney and Tokyo.

Japan’s Nikkei (.N225) skidded 2.5% and S&P 500 futures have been final down 1.8%.

Giles Coghlan, chief forex analyst at HYCM, a brokerage, mentioned the closure of the U.S. marketplace for the Thanksgiving vacation on Thursday had exacerbated strikes.

“We need to see how transmissible this variant is, is it able to evade the vaccines – this is crucial,” Coghlan mentioned.

“I expect this story to drag on for a few days until scientists have a better understanding of it.”

Oil costs slid, with U.S. crude futures down 5.7% to $73.96 a barrel and Brent crude down 4.66% to $78.38 amid recent demand fears.

As buyers dashed for safe-haven belongings, the yen jumped greater than 1% to round 113 per greenback, having languished earlier this week at five-year lows.

The euro rose 0.4% to $1.1251, as security moderately than coverage differentials drove commerce.

The single forex, nonetheless, fell to close 6-1/2 12 months lows in opposition to the Swiss franc at 1.044 francs per euro.

“You shoot first and ask questions later when this sort of news erupts,” mentioned Ray Attrill, head of FX technique at National Australia Bank in Sydney,.

South Africa’s rand fell 2% to a one-year low and its 2030 bond yield soared 25.5 foundation factors (bps). Bond yields transfer inversely to cost.

Other bond markets strengthened, benefiting from their safe haven standing. Ten-year Treasury yields fell 11 bps to 1.5277% and 30-year yields have been down 9 bps to 1.8777%.

Germany’s 10-year bond yield was down 6.2 bps at -0.31%

Gold rose 0.7% to $1,800 an oz.

The market swings come in opposition to a backdrop of already rising concern about COVID-19 outbreaks driving restrictions on motion and exercise in Europe and past.

European nations have expanded COVID-19 booster vaccinations and tightened curbs. Slovakia introduced a two-week lockdown, the Czech authorities will shut bars early and Germany crossed the brink of 100,000 COVID-19-related deaths. learn extra

“I don’t think there’s any going back to the pre-COVID-19 world,” mentioned Mark Arnold, chief funding officer at Hyperion Asset Management in Brisbane.

“We’re just going to get mutations through time and that’s going to change the way people operate in the economy. That’s just reality.”

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Editing by Lincoln Feast and Mark Potter

Passersby wearing protective masks are reflected on an electronic board displaying stock prices outside a brokerage amid the coronavirus disease (COVID-19) outbreak, in Tokyo, Japan, September 29, 2021. REUTERS/Issei Kato

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