Stocks sink on fears over new coronavirus strain

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Stocks, US Treasury Yields and Oil Sink as New COVID-19 Strain Rattles Markets.

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Stocks, Treasury yields and oil sank on Friday, while the yen jumped as a new Covid-19 strain discovered in southern Africa sent a wave of caution to global markets.

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The Asia-Pacific equity gauge was set for the worst fall since March, with Japan and Hong Kong underperforming and travel stocks among the biggest falls. US and European futures fell and the 10-year Treasury yield fell to 1.56%.

Scientists from the World Health Organization and South Africa are studying a recently identified variant that is very different from previous versions and is of serious concern. The UK and Israel banned flights from South Africa and some neighboring countries. Hong Kong confirmed two cases of tension.

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The dollar was at a 16-month high, while the South African rand weakened and commodity currencies retreated. Crude rose 3 per cent more gold. The Black Friday session will be shorter in US markets closed on Thursday for Thanksgiving.

The stress detection comes on top of concerns in markets about high inflation and the prospect of an early exit from ultra-lax monetary settings. Global shares are up about 16% this year, topping the combined total for the past 19 years, after investors poured nearly $900 billion into equity exchange-traded and long-only funds in 2021.

“It’s a scary headline,” said Kyle Rodda, an analyst at IG Markets Ltd., about the virus version, so it may cause a knee-jerk reaction. He added that “North America means a wall of buyers is missing” and that thinner markets tend to make more obvious moves.

Version ‘Playbook’

December futures on the Cboe Volatility Index, a gauge of implied equity swings for the S&P 500, advanced as traders faced turbulence over the reopening of US markets.

Justin Tang, head of Asian research at United First Partners, pointed out that “the world has passed along deltas before,” adding that “there is already a playbook for such situations” and that “mutations are expected and nothing unknown.” “

Meanwhile, Goldman Sachs Group Inc. U.S. economists said they expect the Fed to tighten policy faster than before, including doubling the pace at which it makes $30 billion of purchases per month since January. They see an interest rate liftoff from near zero in June.

In China, regulators have asked top officials of Didi Global Inc to work out a plan to delist it from US markets, people familiar with the matter said. It could revive fears about Beijing’s intentions for its vast technology industry. A gauge of Chinese tech stocks fell.

The Chinese economy slowed in November and car and home sales fell again as the housing market crisis dragged on, according to Bloomberg’s aggregated index of eight early indicators.

For more market analysis, read our MLIV blog.

Some of the major events of this week are as follows:

  • Bank of England Governor Andrew Bailey speaks with Mohamed El Ariane at an event at Cambridge Union. Thursday
    Some of the main moves in the markets:

shares

  • S&P 500 futures fell 1% as of 5 a.m. in London. S&P 500 up 0.2% on Wednesday
  • Nasdaq 100 futures fell 0.5%. Nasdaq 100 up 0.4% on Wednesday
  • Japan’s Topix Index dropped 2.2%
  • Australia’s S&P/ASX 200 index drops 1.7%
  • South Korea’s Kospi index dropped 1.6%
  • Hong Kong’s Hang Seng Index drops 2.2%
  • China’s Shanghai Composite Index dropped 0.6%
  • Euro Stokes 50 futures down 2.1%

currencies

  • Bloomberg Dollar Spot Index up 0.2%
  • The euro was up 0.1% at $1.1223
  • The Japanese yen was up 0.6% at 114.72 per dollar
  • The offshore yuan was down 0.1% at 6.3934 per dollar

bond

  • US 10-year Treasury yield fell eight basis points to 1.56%
  • Australia’s 10-year bond yield fell nine basis points to 1.78%

Goods

  • West Texas Intermediate crude fell 3% to $76.06 a barrel
  • Gold was up 0.5% at $1,797.75 an ounce

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