Fears over a new Covid variant have impacted Asian stock markets and oil prices.

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Fears over a new Covid variant have impacted Asian stock markets and oil prices.

On Friday, Asian markets and oil prices fell, while safe-haven assets soared, as experts warned that a new Covid type could be more infectious than Delta and even resistant to medicines, putting the global recovery at risk.

The B.1.1.529 strain has been blamed for a spike in new cases in South Africa, and it has already been detected in Hong Kong. The World Health Organization will meet later today to decide whether it should be classified as a variety of “interest” or “worry.”

Following the discovery of the South African variety, the United Kingdom and Israel have imposed travel bans on the country and five others in southern Africa, in an effort to prevent the virus from taking hold in people and spreading rapidly.

According to the WHO, “early investigation suggests that this variation has a substantial number of mutations that require and will undergo further study.”

The revelation has shattered Asian market confidence, which was already under strain as traders braced for the Federal Reserve to begin tightening its monetary policy to combat rising inflation.

Tokyo’s stock market dropped more than 2%, while Hong Kong, Sydney, Singapore, and Wellington all fell more than 1%.

Travel-related businesses were among the most hit, as investors fear that governments may impose further restrictions.

Sydney-listed Qantas has lost more than 5% of its value, while Cathay Pacific has lost more than 2%. In Hong Kong, casino operators from Macau were also pounded.

Concerns about the impact on demand if more containment measures were implemented also drove down oil prices.

The increase in uncertainty pushed safe-haven currencies higher, with the yen, a go-to currency in times of crisis, outperforming the dollar.

The dollar rose versus other currencies, including the South African rand, which gained 1.9 percent.

According to Kyle Rodda of IG Markets, “it’s a scary headline” about the virus, which may have triggered a knee-jerk reaction.

The fact that US markets were closed on Thursday for Thanksgiving and that trade would be lighter on Friday “means there’s a wall of buyers missing,” implying that price movements would be amplified.

Even still, United First Partners’ Justin Tang noted that while the current news was concerning, “the world has gone through this previously with Delta” and that countries were better prepared to cope with the crisis. “Mutations are to be expected, not something to be ashamed of.” The Washington Newsday Brief News is a daily newspaper published in Washington, D.C.

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