New version of Covid upsets global markets as oil sinks 5%

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Registered nurse Savanah Wagstaff observes Aliza Burns, a nursing student at Brigham Young University in Idaho, treating a coronavirus-positive patient (COVID-19) in her isolation room at Madison Memorial Hospital in Rexburg, Idaho, USA, 28. October 2021.

Shannon Stapleton | Reuters

World markets rose on Friday according to oa news a highly mutated version of Covid-19 first discovered in South Africa.

The World Health Organization will meet on Friday to discuss the emergence of version B.1.1.529, which South African scientists say contains more than 30 mutations in the spike protein, a component of the virus that binds to cells. This is significantly more than the now prevalent version of Delta, which is itself highly contagious.

Many of these mutations are linked to increased antibody resistance and could affect the version’s behavior in terms of vaccines, treatment and tolerability, health officials said, although the WHO said further investigation is needed to better understand the consequences.

Pan-European Stoxx 600 it fell 2.6% in early European trade, with banks and travel stocks suffering heavy losses, along with the oil and gas sector, as oil prices fell.

International criterion Brent oil during the morning trade in Europe fell by 5.3% to $ 77.84 per barrel, while American oil fell more than 6.5% to $ 73.31.

In the U.S. state, futures on U.S. stocks showed an initial loss of nearly 800 points Dow Jones Industrial Average, while markets in the Asia-Pacific region fell sharply overnight, with Hong Kong Hang Senga Index and Japanese Nikkei 225 each loses more than 2.5%.

The variant was discovered in a Hong Kong quarantine hotel at a traveler from South Africa, with one individual on the other side of the hall also reportedly affected and the remaining passengers quarantined separately.

The UK government has imposed a ban on flights from South Africa and Botswana, where cases of the new version have also been reported, along with Esvatini, Lesotho, Namibia and Zimbabwe, from noon on Friday to 4am on Sunday morning. From then on, passengers from these countries will be subject to a mandatory 10-day quarantine.

Some analysts have suggested that the sharpness of market movements could be exacerbated by lower trading volumes due to Thanksgiving in the US. U.S. markets were closed Thursday and will only be open until noon Friday.

More cautious central banks

Geoffrey Yu, a senior marketing strategist at BNY Mellon, told CNBC “Squawk Box Europe” on Friday that some corners of the market may believe that news of this new version would give the Fed a reason to pause monetary policy normalization, though not necessarily. to agree with this view.

Yu said yes the recent resurgence of Covid cases in Europe, even before the news of this latest version appeared, it showed that “we are still working on this for some time and that there will be circles of risk aversion in the markets due to pandemic concerns.”

Emmanuel Cau, head of European equity strategy at Barclays, said the withdrawal in many large stock markets at or near all-time highs seemed “logical.”

“We have advised greater allocation to the weight sector and hedging against falls at these levels, but we believe that flexible growth and patient central banks should continue to provide a cushion over the medium term while investors have dry dust to buy falls,” Cau said. Friday by email.

“The key is to determine whether current vaccines remain effective against the variants or not. Covid’s uncertainty could force central banks to be cautious.”

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