Shares, oil tumble on virus variant fears, protected havens acquire By Reuters

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

By Carolyn Cohn and Tom Westbrook

LONDON (Reuters) – Global stocks fell on Friday and oil fell below $ 80 a barrel after news of a potentially vaccine-resistant variant of coronavirus took investors to the safety of bonds, the yen and the Swiss franc.

Little is known about the variant found in South Africa, Botswana, and Hong Kong, but scientists say it has an unusual combination of mutations, can bypass immune responses, and is possibly more transmissible.

British authorities consider it the most significant variant to date and have rushed to impose travel restrictions for southern Africa, as did Japan, the Czech Republic and Italy on Friday. [nL8N2SH1HS

The European Union also said it aimed to halt air travel from the region.

“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,” said Chris Scicluna, head of economic research at Daiwa.

The World Health Organization is convening an experts’ meeting later on Friday to evaluate whether the new variant is a “variant of concern.”

Global shares fell 0.8% and were on course for their worst week since early October.

European stocks plunged 2.7%, on track for their worst day since September 2020, with travel and leisure stocks particularly badly hit. ()

sank 3% and 100 fell 2.7% to its lowest in more than a month.

MSCI’s index of Asian shares outside Japan fell 2.2%, its sharpest drop since August. Casino and beverage shares were hammered in Hong Kong, while travel stocks dropped in Sydney and Tokyo.

skidded 2.5% and were last down 1.8%.

Giles Coghlan, chief currency analyst at HYCM, a brokerage, said the closure of the U.S. market for the Thanksgiving holiday on Thursday had exacerbated moves.

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

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

Oil prices slid, with futures down 5.7% to $73.96 a barrel and down 4.66% to $78.38 amid fresh demand fears. [.T][O/R]

As investors looked for safe investments, the yen rose more than 1% to around 113 the dollar after falling to a five-year low earlier this week.

The euro rose 0.4% to $ 1.1251 as security rather than monetary differences fueled trading.

The single currency fell against the Swiss franc, however, at 1,044 francs per euro to almost 6-1 / 2-year lows.

“They shoot first and then ask questions later when this type of news breaks out,” said Ray Attrill, head of FX strategy at National Australia Bank (OTC 🙂 in Sydney.

fell 2% to a one-year low and 2030 bond yields rose 25.5 basis points (bps). Bond yields move in reverse to price.

Other bond markets rose, benefiting from their safe haven status. Ten-year government bond yields fell 11 basis points to 1.5277% and 30-year yields fell 9 basis points to 1.8777%. [US/]

The yield on 10-year German bonds fell 6.2 basis points to -0.31% [GVD/EUR]

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

The volatility of the market is against a backdrop of already growing concerns about COVID-19 outbreaks that are imposing restrictions on movement and activity in Europe and beyond.

European countries have expanded booster vaccinations against COVID-19 and tightened restrictions. Slovakia announced a two-week lockdown, the Czech government will close the lockdowns early, and Germany has passed the 100,000 COVID-19-related death threshold.

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

“We’re only going to get mutations over time and that’s going to change the way people work in business. That’s just the reality.”

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