Asia report: Markets fall amid fears of new Covid-19 variant

by | Nov 26, 2021

Equities in Asia fell across the board on Friday, amid concerns around a new, mutated variant of Covid-19 that has emerged in Africa.
In Japan, the Nikkei 225 was down 2.53% at 28,751.62, as the yen strengthened 1.2% on the dollar to JPY 113.98 in a flight to the safety of the safe-haven currency.

The benchmark’s major components were all below the waterline, with automation specialist Fanuc down 2.68%, fashion firm Fast Retailing losing 3.29%, and technology conglomerate SoftBank Group sliding 5.19%.

SoftBank’s move weaker came after Bloomberg reported that regulators in Beijing had asked Chinese cab-hailing company Didi Chuxing, in which it has a significant holding, to delist in the United States.

The broader Topix index was off 2.01% by the end of trading in Tokyo, closing at 1,984.98.

On the mainland, the Shanghai Composite slipped 0.56% to 3,564.09, and the smaller, technology-heavy Shenzhen Composite fell 0.2% to 2,507.15.

South Korea’s Kospi slid 1.47% to 2,936.44, while the Hang Seng Index in Hong Kong was 2.67% weaker at 24,080.52.

Seoul’s blue-chip technology stocks were in the red, with Samsung Electronics down 1.9% and SK Hynix losing 1.7%.

The moves lower came after the World Health Organization said overnight that it was monitoring a new variant of the Covid-19 coronavirus with “a large number of mutations”.

It said the variant, detected in a small number of cases in South Africa in recent days, had 30 mutations identified in the spike protein.

That was causing the WHO to act rapidly, as changes to the spike protein could affect the efficacy of Covid-19 vaccines against the virus, given the jabs work to help the body identify and fight that protein.

“Early reports suggest it spreads quickly and could be much more resistant to existing vaccines,” said IG chief market analyst Chris Beauchamp.

“While the situation appears confined to the region for now, markets are scrambling to price in a return of restrictions across the globe, taking their cue from the UK’s travel restrictions and the tighter restrictions imposed in Portugal.

“This process is always a noisy and difficult one, and has been exacerbated by the lack of liquidity that is always a feature of markets around Thanksgiving.”

Oil prices dropped well below the $80 per barrel mark as the region entered the weekend, with Brent crude last down 5.73% at $77.51 per barrel, and West Texas Intermediate losing 6.26% to $73.21.

In Australia, the S&P/ASX 200 was 1.73% lower at 7,279.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 1.3% at 12,628.89.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.78% at AUD 1.4016, and the Kiwi retreating 0.57% to NZD 1.4661.

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