Stock markets, crude oil, and cryptocurrencies have tumbled sharply when many countries in the world imposed travel ban on South African countries in the wake of emergence of deadly Omicron, a new Covid variant, originated from South Africa a couple of days ago.
On Friday, the World Health Organization has declared Omicron as a new Covid variant which triggered panic in the global markets and accelerated selling pressure.
Crude oil has dropped by $10 a barrel, to $70/barrel now while Bitcoin has tumbled to around $54,000 from earlier level of $58,000. Ethereum also fell to $4000, from earlier trading of above $4300 in the last 48 hours. The trading board of top cryptocurrencies has turned red, showing selling pressure and an uncertainty in the crypto market after the news of Omicron hit the limelight.
“Where the market is selling off so dramatically is a product of, ‘yes, this is bad news,’ but also the fact that we have had a pretty strong run with relatively low volatility for a while,” Kiran Ganesh, a strategist at UBS Global Wealth Management told media.
The S&P 500 closed 2.3% lower and the Nasdaq composite index dropped 2.2%. European stock markets fell 3% to 5%. The U.S. stock markets were closed Thursday for the Thanksgiving holiday and closed early Friday.
Media reports show the Friday’s decline pulled the benchmark S&P 500 down further from the last week’s record high. Amid supply chain disruptions and shortages of goods and workers in some sectors, investors have been preoccupied by rising prices and expectations about central banks withdrawing stimulus to combat inflation. The emergence of a new variant abruptly shifted their focus back to the core woes of the pandemic.
“The pandemic and COVID variants remain one of the biggest risks to markets, and are likely to continue to inject volatility,” Keith Lerner, a strategist at Truist, wrote in a note to clients.
In Asia, the Nikkei 225 in Japan closed 2.5% lower, and the Hang Seng Index in Hong Kong declined 2.7%.
In Europe, energy stocks led the markets lower. The Stoxx Europe 600 index closed down 3.7%. The FTSE 100 in Britain dropped 3.6%, while major stock indexes in France and Spain fell about 5%.
Analysts have predicted further erosion in crude oil prices, stock markets, and value of cryptocurrencies on Monday (Nov 29).
