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Asian Stocks Down, as New Coronavirus Strain Makes a “Scary Headline” -Breaking


© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Friday morning, ending the week on a down note over the .

Japan’s tumbled 2.35% by 9:13 PM ET (2:13 AM GMT) and South Korea’s fell 0.79%.

Australia saw a drop of 1.28%.

Hong Kong’s dropped 1.89%.

China’s was down 0.30% while the inched up 0.06%.

Scientists and the World Health Organization are currently studying this variant. It was discovered in South Africa and has been described as being very different to previous versions. Although the U.K. has banned South Africa from flights and has five African countries on hold, Hong Kong already has two confirmed cases.

The benchmark fell to around 1.60%, while South Africa’s rand weakened beyond 16 per dollar for the first time in a year.

“The trigger was the news of this COVID variation… and the uncertainty about what this means. Ray Attrill from National Australia Bank, head of FX strategy, said to Reuters that you shoot first and then question later when this kind of news erupts.

Others, however, were optimistic.

The variant is “a scary headline” that could have caused a knee-jerk reaction, IG Markets Ltd. analyst Kyle Rodda told Bloomberg.

“North America off the desks [for a holiday on Thursday] means there’s a wall of buyers missing” and thinner markets make for more pronounced moves, he added.

The strain is currently known as B.1.1.529. This comes at a time when central banks are signaling tighter monetary policies to reduce persistently high inflation. According to Goldman Sachs Group Inc., the Fed may tighten its policy quicker than expected. This includes increasing interest rates to near zero in June and upping bond purchases by $30 billion per month starting January 2022.

“The increased openness to accelerating the taper pace likely reflects both somewhat higher-than-expected inflation over the last two months and greater comfort among Fed officials that a faster pace would not shock financial markets,” Goldman analysts said in a note.

Meanwhile, Bloomberg’s aggregate index of eight early indicators showed that the Chinese economic recovery from COVID-19 continued to slow in November, with car and homes sales continuing to drop as a housing market crisis lingers.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.