Stocks slip, havens rally as new COVID-19 variant spooks investors

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SYDNEY, Nov 26 (Reuters) – Asian shares suffered their sharpest drop in two months on Friday after the detection of a new and presumably vaccine-resistant coronavirus variant despatched investors scurrying towards the protection of bonds, the yen and the greenback.

MSCI’s broadest index of Asia-Pacific shares exterior Japan (.MIAPJ0000PUS) fell 1.3%, its sharpest drop since September. Casino and beverage shares offered off in Hong Kong, and journey shares dropped in Sydney.

Japan’s Nikkei (.N225) skidded 2.5% and U.S. crude oil futures fell almost 2% as nicely amid recent demand fears.

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Scientists stated the variant, detected in South Africa, might be able to evade immune responses. British authorities suppose it’s the most vital variant thus far, fear it may resist vaccines and have hurried to impose journey restrictions on South Africa. learn extra

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

South Africa’s rand dropped 1% to a one-year low in early commerce. The risk-sensitive Australian and New Zealand {dollars} fell to three-month lows and S&P 500 futures fell 0.9%.

The promoting in Asia has international shares (.MIWD00000PUS), on the right track for his or her worst week since early October. Dow Jones futures fell 1% , whereas FTSE futures and Euro STOXX 50 futures every dropped about 1.4%.

Little is understood concerning the new variant. However scientists advised reporters it has “very unusual constellation” of mutations, regarding as a result of they may assist it dodge the physique’s immune response and make it extra transmissible. learn extra

“Markets are anticipating the risk here of another global wave of infections if vaccines are ineffective,” stated Moh Siong Sim, a forex analyst on the Bank of Singapore.

“Reopening hopes could be dashed.”

Moves in Treasuries had been additionally sharp following the Thanksgiving vacation and yields rapidly pulled again a few of the week’s good points. Benchmark 10-year yields fell almost 6 foundation factors to 1.5841%.

The yen jumped about 0.4% to 114.84 per greenback and the Aussie was final down 0.5% at $0.7148.

The strikes come in opposition to a backdrop of concern about COVID-19 outbreaks driving restrictions on motion and exercise in and as markets aggressively value U.S. charge rises subsequent 12 months.

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

Shanghai on Friday restricted tourism actions and a close-by metropolis minimize public transport as China doubles down on its zero-tolerance method that can be unnerving merchants. learn extra

At the identical time a slew of stronger-than-expected U.S. knowledge factors has Fed funds futures markets priced for as many as three charge hikes in 2022.

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Reporting by Tom Westbrook; Editing by Lincoln Feast.

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