Dow futures fall by 700 points due to fears of a new COVID variant discovered in South Africa

Author: | Posted in World News No comments

US stock futures were deep in the red early on Friday and tracked large losses in Asian markets after researchers discovered a new COVID variant in South Africa that may be to blame for a recent dramatic increase in falls.

Investors return to a shortened trading day after the Thanksgiving Day weekend.

How is stock index futures trading?
  • S&P 500 futures

    fell 1.6% to 4,624

  • Dow Jones Industrial Average futures

    decreased 721 points, or 2%, to 35,025

  • Nasdaq-100 futures

    fell 0.8% to 16,222

On Wednesday, Dow industrials

fell 9.42 points to end almost unchanged at 35,804.38. S&P 500

fell 0.2% to close at 4,701.46, just 0.1% below the record high of November 18 at 4,704.54, according to Dow Jones Market Data. Nasdaq Composite Index

rose 0.4% to 15.84.23.

What drives the market?

The discovery of the new COVID variant was announced on Friday by South African Health Minister Joe Phaahla. He said researchers were worried about the high number of mutations and the dramatic increase in infections the country had seen over the past four or five days.

Speaking at an online press conference, he said that the variant, currently known as B.1.1.529, had also been discovered in Botswana and Hong Kong by travelers who had visited South Africa, he said. The World Health Organization’s technical working group is holding an emergency meeting to assess the variant, which researchers are still not sure is more deadly or just more contagious.

“The only bull in the China store that could really trace the global recovery has always been a new strain of Covid-19 that swept across the world and caused the reintroduction of social mass retrenchments,” said Jeffrey Halley, senior market analyst at OANDA, in a note . “All we know so far is that B.1.1.529 is heavily mutated but the markets are not taking any chances.”

After new cases appeared to stabilize at 200 per day, South Africa reported more than 1,200 on Wednesday and 2,465 on Thursday. Researchers and health officials are worried that such a highly mutating variant could escape the vaccine. The British government is banning flights from the country along with five other African nations from Friday.

When stock futures fell and stocks in Asia fell, with the Nikkei 225 index

fell by 2.5% and investors flocked to perceived safer assets such as gold

which jumped $ 14 to $ 1,798.30, the Japanese yen

up 0.7% to 114.50, and government bonds. The yield

at the 10-year US Treasury Department, 9 points fell to 1.5517%.

US crude oil prices


fell 3% to $ 75.90 a barrel due to fears of falling demand in the new variant.

“At the moment, it is understood that the number of cases is small, but due to the thin liquidity levels in Asian trade as a consequence of the US holiday, the reaction seems to be oversized, with a rise in bonds, leading to falling interest rates, and gold higher , says Michael Hewson, chief analyst at CMC Markets.

Investors are returning from the Thanksgiving Day break to a shortened session for US markets, which is often accompanied by thinner volumes as traders often wait until Monday to return. There is no financial data on the calendar for Friday. But the week had been buzzing with concerns about growing COVID cases in Europe and new restrictions.

Fears of a new variant overshadowed Black Friday shopping day, which focuses on retailers when consumers make bargains.

Read: In the face of the biggest rise in inflation in 30 years, shoppers expect to spend much more this holiday season


Add Your Comment

Your email address will not be published. Required fields are marked *