world markets sell off

Picture of mayhem world markets hit hard

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The mood across world markets turned extremely bearish on Friday (Nov. 26) following reports about “a newly identified and possibly vaccine-resistant coronavirus variant” in South Africa.

As headlines centered on various nations imposing travel restrictions on a number of African countries, stocks plunged, oil prices accelerated losses and spot gold advanced amid the panicked flight to safety.

Australian markets suffered their sharpest drop since October 1 with travel stocks tumbling.
New Zealand shares also dropped, with the benchmark NZX 50 Index losing 1.3% to 12,628.89 in its worst session since March 22.

In Japan, the Nikkei 225 Index plunged 2.5% closing below 29,000 for the first time in about a month while the safe-haven yen rallied.

Chinese shares ended lower with Shanghai’s Composite Index off 0.6% to 3,564.09. The Hang Seng in Hong Kong tanked by 2.67%.

Indian benchmarks  fell to their lowest level in three months. The 30-share S&P BSE Sensex and the broader NSE Nifty index both lost over 2%.

Major European indices were also plunging. The pan European Stoxx 600 was down 2.9%, headed for the biggest drop in 13 months, with selling seen across the board. In Paris, the CAC 40 Index has shown a 3.9% nosedive. Germany’s DAX and the UK’s FTSE 100 Index are down by 3.1% and 3%, respectively.

Sentiment throughout the week has also been hampered by various lockdown measures imposed across Europe.

Amid a global sell-off,  US stocks showed a similar pattern in premarket trading as traders returned to their desk after the Thanksgiving holiday, Friday is a shortened trading day with U.S. markets closing at 1 p.m. ET.

Futures for the Dow Jones Industrial Average were down 756 points, slipping 2.11%. The S&P 500 and the Nasdaq 100 are also in negative territory.

In commodities, WTI crude futures tumbled more than 6% to around $73 per barrel, the lowest in near nine weeks, given the potential impact of travel restrictions on demand.

Oil markets were already under pressure amid worries over increased supply brought by a coordinated strategic petroleum reserve release among major consumers earlier in the week.

The OPEC’s advisory board expects a 400,000 barrels per day excess in the oil markets in December and predicted that the surplus would expand to 2.3 million bdp in January and 3.7 million bdp in February if consumer nations proceed with the release.

The new Covid-19 variant “threat” dubbed B.1.1.529, adds to the wall of worry investors are already contending with in the form of runaway inflation, monetary tightening and slowing growth.