Global markets drop sharply on fears of new virus variants

FTSE 100 falls heavily on fears of new virus variants

More than £ 65 billion was erased from the UK’s main stock index on Friday, reflecting fears that a new variant of the coronavirus could wreak more havoc on business and international travel.

The FTSE 100 fell more than 3%, or 240 points, as the market opened on Friday morning, putting it on track for its biggest one-day decline in a year.

Shares of major airlines fell with IAG, the owner of British Airways, falling more than 21% early in the session, while EasyJet plunged 16%. The British government has announced that it will add six countries, including South Africa, to the red list as flights are temporarily banned.

A number of other European countries, including Italy and Germany, were also preparing to ban travelers from southern African countries.

The FTSE 100 was on track for its biggest one-day drop in a year

Also among the big losers were engine maker Rolls-Royce and oil giants BP and Shell.

Overnight, Asian markets suffered their biggest drop in two months after the detection of the possibly vaccine-resistant variant of the coronavirus.

The variant, referred to as B.1.1.529 and first identified in Botswana, has a “very unusual constellation” of mutations that could help it avoid vaccine immunity and natural antibodies, said researchers. scientists. On Friday morning, Israeli health officials said they had detected their first case of the new variant.

Amid the hit to stocks, the pound also took a heavy hit, with the pound falling below $ 1.33 for the first time this year as investors lost their appetite for risk.

The new variant also prompted investors to lower their expectations for a Bank of England (BoE) interest rate hike in December, adding to the downward pressure on the pound.

European markets were all hit hard at the start of the session, with the German DAX down 3.1% and the French CAC 40 down 3.6%.

Increasingly seen as a safe haven for investors during times of turbulence, digital currencies such as bitcoin and ethereum have also fallen by more than 5% and 3.7% respectively.

The SARS-CoV-2 virus with antibodies locked to its spike proteins. Some scientists fear that the new variant may escape these antibodies.

Gold, a traditional investment for nervous traders, is currently in demand, as are the Swiss franc and US Treasuries, BayernLB analysts say.

Elsewhere, oil prices saw their biggest daily decline since July following news of the variant, which UK health officials said was the largest found to date, scientists say. There are fears that the variant could lead to a new wave of infections and travel restrictions, stifling economic growth.

European benchmark Brent crude fell nearly 5% to $ 78.15 a barrel. while benchmark US West Texas Intermediate (WTI) crude fell 6.1% to $ 73.56 per barrel after hitting a two-month low during the session.


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