New COVID variant: Global markets sink as countries bring back restrictions 

The 27-nation EU proposed the travel suspension to member governments after South Africa said the variant was spreading in its most populous province.

Published: 26th November 2021 09:18 PM  |   Last Updated: 26th November 2021 09:18 PM   |  A+A-

People lineup to get on the Air France flight to Paris at OR Tambo's airport in Johannesburg, South Africa', Friday Nov. 26, 2021. (Photo | AP)


NEW YORK: Global stocks and oil prices tumbled Friday after South Africa found a fast-spreading coronavirus variant and the European Union proposed suspending air travel from southern Africa.

London's benchmark fell 3per cent and Tokyo lost 2.5 per cent.

Shanghai, Frankfurt and Hong Kong also declined sharply.

Futures for the Dow Jones Industrial Average dropped more than 2per cent.

Some European countries already tightened anti-virus controls this week after their own case numbers spiked.

Austria imposed a 10-day lockdown, while Italy restricted activity by unvaccinated people.

Americans were advised by their government to avoid Germany and Denmark.

The 27-nation EU proposed the travel suspension to member governments after South Africa said the variant was spreading in its most populous province.

Britain banned flights from South Africa and five nearby countries.

"Investors are likely to shoot first and ask questions later until more is known," Jeffrey Halley of Oanda said in a report.

That was evident from the action in the bond market, where the yield on the 10-year U.S. Treasury note fell to 1.54 per cent from 1.64 per cent on Wednesday.

The bond market was closed Thursday in the U.S. for Thanksgiving.

In midday trading, the FTSE in London fell to 7,099.69 and the DAX in Frankfurt lost 3.1 per cent to 15,429.26.

The CAC in Paris plunged 3.8 per cent to 6,805.72.

On Wall Street, the future for the benchmark S&P 500 future lost 1.7 per cent and the futures for the Nasdaq slipped 1per cent. U.S. markets were closed Thursday and are due to reopen Friday for a shortened trading session.

In Asia, the Shanghai Composite Index lost 0.6 per cent to 3,564.09 and the Nikkei 225 in Tokyo declined to 28,751.62.

The Hang Seng in Hong Kong tumbled 2.7 per cent to 24,080.52.

Investors already were more cautious after Federal Reserve officials said in notes from their October meeting released this week they foresaw the possibility of responding to higher inflation by raising rates sooner than previously planned.

Investors worry central bankers might feel pressure to withdraw stimulus earlier than planned due to stronger-than-expected inflation.

The Fed said earlier it foresaw keeping rates low until late next year.

Financial markets had been encouraged by strong U.S. corporate earnings and signs the global economy was rebounding from last year's history-making decline in activity due to the pandemic.

Stock prices have been boosted by easy credit and other measures rolled out by the Fed and other central banks.

In energy markets, benchmark U.S. crude fell USD 4.22, or 5.4 per cent, to USD 74.17 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the price basis for international oils, shed USD 4, or 4.9 per cent, to USD76.92 per barrel in London.

The Czech Republic has declared a state of emergency, Portugal reimposed strict fines and Austria imposed a national lockdown as Europe steps up measures to tackle a worrying spike in COVID-19 infections, largely from the Delta variant.

In contrast, the UK is sticking to what has been characterised as "Plan A" of its winter strategy, with "caution" being the operative word as it continues with a largely restrictions-free scenario.

"The UK remains in a strong position. We've made tremendous gains as a result of the decisions that we took over the summer and the initial success of our booster programme," UK Health Secretary Sajid Javid told the House of Commons on Friday.

"But we're heading into winter and our booster programme is still ongoing. So we must act with caution," he said.

He was speaking after it was confirmed that the UK's health authorities are investigating the new B.1.1.529, detected in South Africa with a worrying number of spike mutations that could be potentially more infectious and vaccine-resistant.

While the new variant shares many of the features of the Alpha, Beta and Delta variants, early indications are it may be even more transmissible than the highly transmissible Delta variant, first identified in India and behind the UK's summer COVID-19 wave, which resulted in its third major nationwide lockdown.

"This [B.1.1.529] variant is a reminder for all of us that this pandemic is far from over. We must continue to act with caution, and do all we can to keep this virus at bay including, once you are eligible, getting your booster shot. We've already given over 16 million booster shots," Javid said.

And, it is this third top-up booster vaccine dose, now being offered to everyone aged above 40 and after a six-month gap from their second dose, that is being credited with much of the UK's different pandemic trajectory than its European neighbours.

The Delta variant had hit the UK at a time earlier this year when European countries remained locked down and therefore experts believe they are now experiencing the wave that has already swept Britain.

"We are not behind Europe in this wave. They are behind us," said Professor Paul Hunter from the University of East Anglia.

The World Health Organisation (WHO) said this week that Europe is the only region of the world where coronavirus cases are rising.

But the UK is on a somewhat different path despite the daily coronavirus infection numbers hovering around the 40,000 mark.

A relatively high vaccination rate and lower vaccine hesitancy, particularly among the elderly, means hospitalisations and deaths are far lower than in previous waves.

"Get your booster as soon as you can", has been the consistent message from British Prime Minister Boris Johnson, who repeated it again this week.

"It is by vaccinating our country that we have been able to get your staff back to their place of work, to open our theatres, our restaurants and get back for longer now than any comparator country, to something like normal life," he said.

And, from the general statistics and Christmas buzz around the Black Friday sales this week, it would seem that this "something like normal" is what is in place for the moment.

It is hoped this trend can continue and there will be no need for the so-called "Plan B" set out by the government as part of its winter strategy, which would involve mandatory mask wearing and work from home restrictions.

The National Health Service (NHS) vaccination programme is seen as a major success story for the UK ,with 88 per cent of those aged 12 and over now having received at least one dose of a COVID vaccine.

Meanwhile, the UK's neighbours in Europe are attempting to curb the COVID-19 winter spike through various means, from national lockdowns, to limiting access to certain services and pushing for an increase in vaccination rates.

Around 60 per cent of people in Western Europe are fully immunised against COVID-19, but only about half as many are vaccinated in Eastern Europe.

Now, all eyes will firmly be on the new potentially highly infectious variant detected in South Africa, which remains under investigation in the UK and Europe.

Meanwhile, The European Union said on Friday that it will ease its restrictions on exporting COVID-19 vaccines.

The Commission, the EU's executive arm, said that as of January it will no longer require vaccine producers to request special authorisation to export outside the 27-nation bloc.

Earlier this year when vaccines were still in short supply, the EU introduced a mechanism to keep some of the jabs it secured from AstraZeneca, the Anglo-Swedish drug company, from being diverted elsewhere.

The export control system, aimed at making sure large drug companies would respect their contracts, was used by the EU in March, when a shipment of more than a quarter million AstraZeneca vaccines destined for Australia was blocked from leaving.

When the dispute with AstraZeneca broke, the EU was lagging well behind the United States and other countries in COVID-19 vaccinations.

According to Stella Kyriakides, the Commissioner for Health, the bloc has now vaccinated over 65% of the total EU population of some 450 million inhabitants.

The EU and AstraZeneca said in September that they reached a deal to end their legal battle over the slow pace of deliveries of the company's COVID-19 vaccines.

EU commission spokeswoman Dana Spinant said the "transparency of exports" will be ensured by a new monitoring mechanism that will provide the commission with companies' vaccine export data.

Spinant noted that the EU is the biggest global provider of COVID-19 vaccines, with over 1.3 billion doses exported to more than 150 countries.

Amid a new significant uptick in infections in the EU, European Commission President Ursula von der Leyen said vaccinations need to be stepped up further.

"We need to convince more people to get vaccinated," she said.

"The good news is that we have enough vaccine doses. By the end of this week, Europe will have delivered 1 billion doses to our member states."

Coronavirus infections in the Czech Republic jumped to a new record high Friday, a surge that hit the country's president and delayed the appointment of the new prime minister.

The Health Ministry said the daily tally of new cases hit 27,717 the previous day.

That's almost 2,000 more than the previous record, set on Tuesday.

The country's infection rate has risen to a new record high of 1,231 new cases per 100,000 residents over the past seven days.

Meanwhile, Czech President Milos Zeman will be discharged from Prague's military hospital on Saturday.

A day earlier, he was discharged following more than a month's treatment for an unspecified illness but was readmitted only hours later after testing positive for COVID-19.

The president received monoclonal antibodies and has no symptoms of COVID-19, the hospital said.

Zeman, 77, was rushed to the hospital on Oct 10, a day after the election to the lower house of parliament, and was treated in an intensive care unit.

His condition was attributed to an unspecified chronic disease.

The presidential office said Zeman after being discharged would swear in Petr Fiala, the leader of a coalition that won the election, as the country's new prime minister.

The ceremony had been due to take place on Friday.

"It's in the interest of everyone to have a new government soon," Fiala said.

The office said the ceremony will be organised in line with the current coronavirus measures but details were unknown.

Those who test positive must isolate in the Czech Republic.

The new record was reported a day after the Czech government declared a 30-day state of emergency and imposed additional coronavirus restrictions in its effort to tackle the surge.

Among the other measures that became effective Friday, all Christmas markets across the country are banned, as is drinking alcohol in public places.

Bars, restaurants, night clubs, discotheques and casinos have to close at 10 pm.

The number of people at culture and sports events will be limited to 1,000 who are vaccinated or have recovered from COVID-19 while all other public gatherings can be attended by up to 100 visitors, down from 1,000.

The nation of 10.7 million has registered 32,643 deaths.

The Czech Republic has also banned entry to foreigners who have spent more than 12 hours in the past two weeks in South Africa, Namibia, Lesotho, Swaziland, Zimbabwe, Botswana, Mozambique and Zambia in reaction to a new coronavirus variant, the Foreign Ministry said on Friday.

The exceptions include EU nationals and long-term Czech residents.

Prime Minister Naftali Bennett said on Friday that Israel is "on the threshold of an emergency situation" after authorities detected the country's first case of a new coronavirus variant and barred travel to and from most African countries.

The Health Ministry said it detected the new strain in a traveler who had returned from Malawi and was investigating two other suspected cases.

The three individuals, who had all been vaccinated, were placed in isolation.

A new coronavirus variant has been detected in South Africa that scientists say is a concern because of its high number of mutations and rapid spread among young people in Gauteng, the country's most populous province.

At a Cabinet meeting convened Friday to discuss the new variant, Bennett said it is more contagious and spreads more rapidly than the delta variant.

He said authorities were still gathering information on whether it evades vaccines or is deadlier.

"We are currently at the threshold of an emergency situation," he said.

"I ask everyone to be prepared and to fully join in the work around the clock."

The government later said that all countries in sub-Saharan Africa would be considered "red countries" from which foreign nationals are barred from traveling to Israel.

Israelis are prohibited from visiting those countries and those returning from them must undergo a period of isolation.

The Israeli military will work to locate all individuals who have been to red countries within the past week and instruct them to go into isolation while testing is carried out, it said.

Israel launched one of the world's first and most successful vaccination campaigns late last year, and nearly half the population has received a booster shot.

Israel recently expanded the campaign to include children as young as 5.

But the country only recently managed to contain a wave of infections driven by the highly contagious delta variant.

Israel, with a population of more than 9 million, has reported at least 8,182 deaths since the start of the pandemic.

It currently has more than 7,000 active cases, including 120 who are seriously ill, according to the Health Ministry.


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