As the new Covid variant scared the market, stock and oil prices fell

As global investors’ concerns about a new variant of Covid-19 have intensified, stocks and oil prices have fallen, and the variant has prompted the UK to impose severe travel restrictions on southern African countries.

The sharp sell-off in the stock market was led by Hong Kong, and two cases of this variant were confirmed late Thursday. Fearing that new pressures might slow the recovery of the global economy and further isolate the Asian financial center with one of the strictest isolation systems in the world, the city’s benchmark Hang Seng Index fell 2.5%.

“I looked at my screen today and there was almost no green—all red,” said Andy Maynard, a trader at investment bank China Renaissance Capital in Hong Kong. “It’s all in the tail of this Covid strain.”

Elsewhere in Asia, the Tokyo benchmark Topix Index fell 2% on Friday. UK bans direct flights Six countries, including South Africa, until the quarantine hotel began to operate.

When Wall Street opens later that day, the futures market expects the US stock market to fall by 1%, while the London FTSE 100 Index and the European Stoxx 50 Index are each expected to fall by about 2%.

Travel stocks were hit hardest. Japan Airlines fell more than 6%, and Hong Kong’s flagship airline Cathay Pacific fell nearly 4% due to concerns about increased international travel restrictions.

The so-called B.1.1.529 Sars-Cov-2 variant originally discovered in Botswana is believed to be responsible for the surge in Covid cases in southern Africa in the past week, and because of its apparent ability to shock global health officials to evade the vaccine and outperform the Delta variant Spread faster.

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

In terms of currency, the new travel restrictions caused the South African rand to fall by 1.7% against the US dollar to around 16 rand, which is the country’s lowest level in more than a year, as the country faces the prospect of undermining the tourist season this year.

Other emerging market currencies, including the Mexican peso and the Turkish lira, fell about 1.4%.

In the commodity market, concerns about the disruption of global trade hit oil prices, with the international benchmark Brent crude oil falling 2.5% to US$80.14 per barrel. US market trader West Texas Intermediate fell 2.2% to $75.92.

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