Global stocks plunged Friday.
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Global stocks are cratering after a new, highly mutated COVID variant was discovered in South Africa.
Analysts said volatility would be worsened by poor liquidity, with US trading limited by Thanksgiving.
Another said investors are simply taking no chance as they wait for more details about the new variant.
Global stocks are being hammered on Friday after a new, heavily mutated COVID variant was identified in South Africa, causing countries to limit travel and sparking fears of another wave of cases.
Scientists are racing to find out whether the new variant, called B.1.1.529, is more infectious or deadly than previous strains. South Africa has confirmed around 100 cases, but it’s already been found as far away as Hong Kong.
Global investors are not liking what they’re seeing. S&P 500 futures were last down 1.73%, suggesting stocks will plunge at the start of a Thanksgiving-shortened trading day. Dow Jones futures dropped 2.16%.
In Europe, the continent-wide Stoxx 600 tumbled 2.57% in morning trading after Tokyo’s Nikkei 225 dropped 2.53% overnight. Oil prices have cratered more than 5% as investors weigh the chances of more lockdowns and travel bans.
Commerzbank analysts called it a “black Black Friday.” Here’s what others are saying as the new variant shakes markets.
Poor liquidity is driving volatility
“US equity futures shot lower from the moment they opened overnight on the new Covid variant news,” said Steen Jakobsen, chief investment officer at Saxo Bank.
“Given poor liquidity today in the US, as many are away from their desks for a long holiday weekend and the market is only for a half session, any significant flows by traders looking to reduce risk could mean significant volatility.”
Markets are taking no chances
“Investors are voting with their feet this morning,” said Jeffrey Halley, senior market analyst at trading platform …read more