Global markets brace for a week of anxiety ahead of concerns over Omicron Covid variant

As of 1:30 a.m. ET on Monday, Japan Nikkei 225 (N225) fell about 1.6%, while that of Hong Kong Hang Seng Index (HSI) fell 1.2%. South Korea Kospi (KOSPI) and Australia’s S&P/ASX 200 fell about 0.9% and 0.5%, respectively. Of China Shanghai Composite (SHCOMP) flat.
But in the United States, stock futures contract upwards. Dow futures, S&P 500 futures and Nasdaq futures all rose 0.5%, 0.8% and 1%, respectively.
Oil prices also shows an improvement. Brent crude, the global benchmark, rose more than 3% to around $75 a barrel, as U.S. crude rose 4% to $71.
But analysts are still bracing for signs of how Omicron The variant could jeopardize more lives, disrupt the global economy and continue to affect markets following Friday’s sharp sell-off.

Fear of the unknown

NS Omicron variant of coronavirus reminded a new round of travel restrictions worldwide and raise concerns about What could be next? during the pandemic.
On Friday, the World Health Organization (WHO) Specimen designation as a “variant of interest”, and says that many studies on it have been conducted.
Then a update from the organization on Sunday, urging people to continue social distancing, wear masks and maintain hand hygiene.

It remains unclear whether Omicron is more infectious … than other variants, including Delta.

“[The] WHO is working with technical partners to understand the potential impact of this variation on our existing countermeasures, including vaccines. ”

Stocks and oil plunge as new Covid variant worries global markets

In a note on Saturday, Nohshad Shah of Goldman Sachs said it was too early for analysts to “draw conclusions”.

“It should be emphasized that at this stage we have very little laboratory evidence and very limited real-world data,” he notes.

But [selloff] Following Friday’s news of the concerning new variant as a reminder of the high macro volatility in the current environment, “Shah, co-head of interest rate sales for Europe, Middle East and Africa , Write.” The next few weeks can be quite nerve-wracking for the market. “

Dow records worst day in more than a year as fears of new Covid-19 variant take hold of global markets

In a report Sunday, economists at Morgan Stanley said the arrival of fresh money poses “short-term risks” to their outlook for Asia.

“However, with a much higher proportion of the population vaccinated, the downside risk to growth may be less than what happens in mid-2021, provided the variant is not more challenging than Delta.” , they added, referring to very contagious Delta variant it was the first time detect this early year.

“To assess the impact of the Omicron variant, we are monitoring in detail its transmissibility and its impact on vaccine effectiveness and hospitalization and mortality.”

Market crash

On Friday, stocks around the world fell as fear enveloped global markets. Oil prices fell more than 10%.

United States, Dow (INDU) recorded its worst day in over a year, fell sharply by 905 points, or 2.5%.
NS S&P 500 (SPX) also had its worst day since February, closing down 2.3%.
Give Nasdaq Composite (COMP), it was the worst day since September. The index ended down 2.2%.

Friday had a short US session that ended around lunchtime, after markets closed on Thursday for Thanksgiving. Traditionally, the half-day session has lower volume, which can exacerbate volatility in the market.

Dan Ives, managing director of equity research at Wedbush Securities, wrote in a note over the weekend that his team viewed Friday’s roadmap “as an obvious buying opportunity.”

“Ultimately, this is not the first variant or the last,” he said.

“While the volatility and news flow surrounding this situation will take over the headlines, our technology [investing] playbook remains unchanged. “

— Anneken Tappe, Christina Maxouris and Laura He contributed to this report.


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