Stocks and oil prices tumble as new variant of Covid scares markets

Shares and oil prices fell as concerns from global investors mounted over a new variant of Covid-19 that prompted the UK to impose severe travel restrictions on countries in southern Africa.

The sharp drop in equities was led by Hong Kong, where two variant cases were confirmed on Thursday evening. The city’s benchmark Hang Seng fell as much as 2.5% as new tension could slow the global economic recovery and further isolate the Asian financial hub, which has one of the world’s most quarantine systems. strict in the world.

“I’m looking at my screen today, there’s hardly any green – it’s all red,” said Andy Maynard, a Hong Kong-based trader at investment bank China Renaissance. “It’s all about the tail of this Covid strain. “

Elsewhere in Asia, Tokyo’s Topix benchmark fell 2% on Friday after the UK banned direct flights from all six countries, including South Africa, until hotels in quarantine are operational.

Futures markets caused US stocks to fall 1% as markets open on Wall Street later in the day, while London’s FTSE 100 and Europe’s Stoxx 50 indexes were both expected to fall by around 2%. %.

Travel stocks were among the hardest hit, with Japan Airlines down more than 6% and Hong Kong’s national carrier Cathay Pacific lost nearly 4% amid concerns over increased restrictions on international travel.

The B.1.1.529 Sars-Cov-2 variant, first identified in Botswana, is believed to be behind an increase in Covid cases in southern Africa over the past week and has alarmed officials of the global health due to its apparent ability to evade vaccines and spread faster than the Delta variant.

Israel has also banned travelers from South Africa, and the World Health Organization will hold an emergency meeting on Friday to discuss the new variant, which has been described as the most worrying strain ever encountered by people. researchers.

In foreign currencies, the new travel restrictions pushed the South African rand down 1.7% to around R16 against the dollar, marking the currency’s weakest level in more than a year as the country risked falling. spoil the tourist season this year.

Other emerging market currencies, notably the Mexican peso and Turkish lira, slipped about 1.4%.

In commodities markets, concerns about the disruption of global trade affected oil prices, with international benchmark Brent crude falling 2.5% to $ 80.14 a barrel. US marker West Texas Intermediate fell 2.2% to $ 75.92.

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