Stocks and Oil Prices Drop – COVID-19 Influence
Stocks and oil prices fell on Friday. Concerns from global investors about the new version of COVID-19 have grown even more. This forced the U.K. to impose strict travel restrictions on specific countries. Topix led the sharp sell-off in shares, which fell 2.4 percent on Friday. This came after the U.K. canceled direct flights from six countries.
Futures markets saw U.S. stocks fall 1 percent. The European Stoxx 50 and London FTSE 100 indices should fall by around 2 percent. In Hong Kong, where two cases of the coronavirus variant have been confirmed, the Hang Seng index fell 2.2 percent. At the same time, there are concerns that the new strain could slow global economic recovery. Moreover, further isolate the financial center of Asia, which has one of the strictest quarantine systems in the entire world.
Travel promotions suffered the most. Japan Airlines fell 6.6 percent. Cathay Pacific lost 3.6 percent due to increased restrictions on international travel. The B.1.1.529 Sars-Cov-2 variant, first detected in Botswana, is the main reason for the dramatic increase in COVID cases over the past week. It seems it can constrain vaccines and circulate faster than the Delta variant. Israel also banned travel from South Africa. The World Health Organization will hold an emergency meeting on Friday to discuss the most troubling strain that researchers have yet to meet.
New travel restrictions cut the South African rand by 1.7 percent. This is the weakest level of the currency in the last year. The Mexican Peso and the Turkish Lira also depreciated. Oil prices have also been worried about the slowdown in global trade in commodity markets. The cost of Brent was $80.34 and fell 2.3 percent. West Texas Intermediate fell to $76.14, or 2.9 percent.
Asia Pacific stocks
The most significant drop was observed in Japan. The Nikkei 225 fell 2.4 percent, while the Topix fell 1.8 percent overall. Japanese stocks suffered a 0.3 percent increase in Tokyo CPI every month. While this is still small compared to rising inflation in other parts of the world, it was the most significant increase in the city since the summer of 2020.
The stock market downturn perfectly reflects the intensity of the new strain. Concerns about monetary tightening in the U.S. are also evident. Some members of the bank’s November committee support accelerating the tightening of the central bank. At the same time, the Australian S&P/ASX 200 fell 1.4 percent. South Korea’s Kospi even fell 1 percent. China’s CSI 300 lost more than 0.6 percent.
Tokyo Shares and COVID-19
The discovery of the new strain has affected all industries, including real estate, air transport, creating land transport problems. The shares were low from the beginning, which intensified the loss even more. Sales accelerated in the afternoon when the Nikkei index fell 900 points, more than 3 percent.
According to the market strategist, reports on a new version of COVID-19 posed a risk to the market. The sense of uncertainty is exacerbated. Experts fear that the new strain confirmed in South Africa could be far more dangerous than the Delta and that the effectiveness of COVID-19 vaccines could be called into question because of the mutational nature of the virus. For prevention, many countries have restricted flights from African countries and enacted domestic regulations.
The South African option could further reduce the opportunity for travel and thus endanger the economy, businesses, and human lives.
ANA Holdings fell 4.5 percent. Japan Airlines was down 6.5 percent. East Japan Railway fell 2.4 percent. Export-concentrated shares dropped as the yen reinforced against the U.S. dollar. Canon fell 2.0 percent. Panasonic fell 2.8 percent. Mazda Motor fell 2.7 percent. Nissan Motor fell 1.6 percent. The volume of trading on the main section increased to 1,302.90 million shares.
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