NEW YORK (Dispatches) - Stocks, oil prices and government-bond yields slumped after South Africa raised the alarm over a fast-spreading strain of the coronavirus, triggering concern that travel restrictions and other curbs will spoil the global economy’s recovery.
Futures pointed to losses of about 1.6% for the S&P 500 and 2.2% for the Dow Jones Industrial Average when the U.S. stock market opens for a holiday-shortened trading session Friday. Brent crude slid 5.3% to under $77 a barrel, putting the global energy benchmark on track for its biggest one-day loss since July, as traders fretted that limits on movement could reduce demand for transportation fuels. Bitcoin skidded 8.9% to below $54,000.
Chinese, Japanese and Indian stocks dropped. The Shanghai Composite Index lost 0.56%, the Nikkei 225 in Tokyo tanked by 2.5%, while the Hang Seng in Hong Kong had plunged 2.67% as of 08:20 GMT.
Indian benchmarks dropped to nearly three-month lows, with the Sensex and the Nifty50 both losing over 2%. New Zealand and Southeast Asian markets also declined.
Major European indexes were also plunging on the news. Europe’s Euronext 100 and London’s FTSE 100 fell 3%. Germany’s DAX dropped 2.9%, while France’s CAC plunged 3.6% at the start of Friday’s trading.
U.S. stocks showed a similar pattern in premarket trading, with Dow futures down 800 points, slipping 2%. The S&P 500 and the Nasdaq 100 are also in negative territory.
“There is fear of this new variant spreading to other countries which might again derail the global economy… So the markets might continue to reel under pressure and would actively track the Covid situation globally,” Hemang Jani of Motilal Oswal Financial Services told CNBC.
Reports of the new and possibly vaccine-resistant “super mutant” Covid-19 variant, dubbed B.1.1.529, sparked fears among investors, fearing more travel curbs after the UK temporarily suspended flights from South Africa and neighboring states in response to the new strain.