Investor fear is growing in the face of the potential impact of variant B.1.1.529 on the world economy. In addition, the Asian and European stock markets reflect the concern over the resurgence of the pandemic.
The confirmation in South Africa of a new worrying variant of the coronavirus with mutations that, according to experts, mark a "great leap in the evolution" of the pandemic, spreads its financial consequences in the global economy in the face of fear of new blockages.
All Asian stock markets closed in the red this Friday. The news generates alerts among investors. Oil collapses, and stocks in Europe fall by as much as 4%, hitting mainly banks, companies in the tourism sector, and commodities.
In Asia, stock market indicators were in negative territory after the publication of studies warning against the rapid spread in some areas of the world, and particularly in South Africa, of the so-called "B.1.1.529", potentially more contagious than the Delta variant, which unbalanced the globe in recent months.
The Nikkei 225 index in Tokyo closed 2.53% lower, after losing more than 3% during the session. In Hong Kong, at the beginning of the afternoon, the Hang Seng lost 2.2%, while the KOSPI of South Korea lost 1.3%. Meanwhile, in Shanghai, Mumbai, and Taipei, the trend was also negative.
The spread of this new variant increases the fear of adopting more severe restrictions to stop an uncontrollable escalation of infections. The idea of repeating confinements like the one decided by Austria flies over Europe. Germany, the leading economy of the continental bloc, is studying tightening the restrictions even more. Portugal, one of the member states with the highest vaccination rate, has just decided on a one-week blockade for after Christmas.
With this scenario, economic forecasts weaken, and with it, expectations of improvements in business balance sheets, one of the main drivers of the improvement in the stock market in recent months, for some, post-pandemic recovery.
"Because they have the Delta wave in mind at the beginning of the year, investors tend to shoot first and ask questions later, until they learn a little more," Jeffrey Halley, OANDA Senior Market Analyst, summed up to the trade press. The Asia Pacific, to justify the shock of market stress.
The EU Commission president, Ursula von Leyen, anticipating that the European Union aims to stop air travel from the southern African region, confirmed the blow to the commercial aviation sector this morning.
"The Commission will propose, in close coordination with the Member States, to activate the emergency brake to stop air travel from the southern African region due to variant of concern B.1.1.529," he said via his Twitter account.
Investors punished, in Friday's day in Asia, the airlines that would suffer a possible return of the lockdown sequences or the reestablishment of travel restriction measures. In Tokyo, the shares of Japan Airlines and ANA Holdings fell 6.1% and 5.3%, respectively. In Hong Kong, Cathay Pacific, meanwhile, fell 3.7%.
The oil sector is also prey to fears. Financial centers anticipate that the restrictions would automatically reduce crude consumption. The price of a barrel also fell 2% in Asia on Friday, reaching $ 80.11.
In London, one of the most important financial centers globally, the picture was also repeating itself. The British press reflected scientific concern in the business journals. The chief medical adviser of the UK Health Security Agency warned that the new variant is the most "complex" and "worrisome" seen so far.
The FTSE 100 fell more than 3% when the market opened on Friday morning, reflecting the fears. Shares of major airlines tumbled with IAG, the owner of British Airways, falling more than 21% in early trading, while EasyJet plunged 16%. Engine maker Rolls-Royce and oil giants BP and Shell were also among the big backs.
The evocation of an epidemic panorama such as the one supported by the spread of the Delta variant also pushes financial specialists to direct their investments towards safe currencies.
The yen, the Japanese currency, gained just over 0.6% against the dollar, which also added concern to exports from that country. As a result, the automaker Toyota, the world's largest automaker, and its competitor Honda lost nearly 2%.
Finally, a worsening of the pandemic not only suggests that a slowdown in growth in the world economy could return. Inflationary tensions persist. One of the day's data, which analysts are watching closely, is that of German import prices. The year-on-year rise has accelerated to 21.7%, above the 19.6% predicted by specialists.