New Covid variant stirs global markets, oil prices fall by 5%

On October 28, 2021, registered nurse Savanah Wagstaff watched Aliza Burns, a nursing student at Brigham Young University in Idaho, treating a coronavirus in his isolation room at Madison Memorial Hospital in Rexburg, Idaho, USA COVID-19 positive patients.

Shannon Stapleton | Reuters

Global markets fell into chaos on Friday Severely mutated Covid-19 variant First discovered in South Africa.

The World Health Organization will meet on Friday to discuss the emergence of the B.1.1.529 variant. South African scientists claim that the variant contains more than 30 mutations in the spike protein, which is a viral component that binds to cells. This far exceeds the dominant Delta variant, which itself is highly contagious.

Health officials said that many of these mutations are related to increased antibody resistance and may affect the variant’s behavior in terms of vaccines, treatment, and transmission, although the WHO said further investigations are needed to better understand its effects.

Pan-European Stoke 600 Europe fell 2.4% in early trading, and as oil prices plummeted, banking and travel stocks, as well as the oil and gas sector, suffered heavy losses.

International benchmark Brent crude oil In early European trading, it fell 5.3% to US$77.89 per barrel, while U.S. crude oil It fell more than 6.2% to $73.58.

U.S. stock futures fell more than 800 points at opening Dow Jones Industrial Average, While the Asia-Pacific market fell sharply overnight, and the Hong Kong stock market Hang Seng Index And Japanese Nikkei 225 Each fell more than 2.5%.

The benchmark 10-year U.S. Treasury bond yield fell more than 11 basis points to 1.5277% 4 AM Eastern Time. The 30-year Treasury bond yield fell to 1.8798%. The rate of return is inversely proportional to the price, and 1 basis point is equal to 0.01%. Spot gold It rose by about US$19 to US$1,808 per troy ounce.

The variant has been detected in the Hong Kong quarantine hotel of a traveler from South Africa. It is reported that a person across the lobby was also affected, and the remaining travellers were quarantined separately.

From noon on Friday to 4 am on Sunday, the British government banned departures from South Africa and Botswana, as well as Eswatini, Lesotho, Namibia and Zimbabwe, and banned departures from South Africa and Botswana. From then on, a 10-day quarantine period will be enforced for travelers from these countries.

Some analysts said that due to the reduced trading volume during the Thanksgiving holiday in the United States, market volatility may intensify. The US market is closed on Thursday and will last until noon on Friday.

Cryptocurrency has not avoided the blow. According to Coin Metrics data, Bitcoin has fallen 7% in the past 24 hours to $54,561, which is the lowest level since October 8. The cryptocurrency has fallen by 20% from its all-time high of nearly $69,000 Early this month.

Proponents of Bitcoin often describe it as “digital gold”, referring to the status of this yellow metal as a so-called safe-haven asset.

Cryptocurrency investors say that virtual currencies provide a store of value and a hedge against inflation. Other cryptocurrencies also fell sharply on Friday. Ethereum, the second largest cryptocurrency, plummeted by more than 10% to $4,007, while XRP plummeted by 10% to around 95 cents.

The central bank is more cautious

Geoffrey Yu, senior market strategist at the Bank of New York Mellon, said in an interview with CNBC’s “Squawk Box Europe” on Friday that some corners of the market may believe that the news of this new variant will give the Fed a reason to suspend its monetary policy. Although he does not necessarily agree with this view.

Yu said, Covid cases in Europe have come back recentlyEven before the news of this latest variant appeared, it indicated that “we will still deal with this issue for some time. Due to pandemic concerns, there will be several rounds of risk aversion hitting the market.”

CNBC Pro’s stock selection and investment trends:

Emmanuel Cau, Head of European Equity Strategy BarclaysSaid that since many major stock markets are at or near historical highs, the correction seems “logical”.

“We have recommended more barbell sector allocation and downward hedging at these levels, but we believe that resilient growth and patient central banks should continue to provide buffers in the medium term, while investors have dry powder to buy on dips,” Cau Represents Friday emails.

“The key is to figure out whether the current vaccine is still effective against these variants. Covid uncertainty may force the central bank to proceed with caution.”

-CNBC’s Vicky McKeever and Ryan Browne contributed to this report.

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