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Risk assets plunge as virus fears cause post-Thanksgiving blues -Breaking

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© Reuters. FILEPHOTO: Passersby clad in masks see the electronic board showing stock prices outside an brokerage, during the COVID-19 (coronavirus) epidemic, Tokyo, Japan. September 29, 2021. REUTERS/Issei Kato

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Written by Chris Prentice, Carolyn Cohn

WASHINGTON/LONDON – U.S. shares tumbled Friday, as markets reopened for Thanksgiving. European stocks were in danger of their worst declines since last year. Oil prices fell to two-months lows after investors fled to safer-haven assets fearing a potentially vaccine-resistant coronavirus.

Closed at 34,899, it fell 905 points or 2.5%. The lost 106 points or 2.3% to 4,594 and dropped 353 point, or 2.2% to 15,491 on Friday as the U.S. market closed earlier.

AMC Entertainment, Rolls Royce, easyJet, United Airlines, Carnival, and other companies that have benefited from this year’s economic reopening are just a few of the risk assets.

Peter Rutter from Royal London Asset Management, who heads equities said that “This might be the time people remember as delaying the economic recovery or rate rises.”

Scientists believe that the unique combination of mutations found in South Africa Botswana Israel, South Africa and Hong Kong could allow this variant to escape immune response and be transmissible.

It was claimed by Britain that it was the most important variant and one of many countries to place travel restrictions on Southern Africa.

Although the European Commission stated that it would consider suspending travel to countries affected by the new variant, the World Health Organization cautioned against imposing restrictions too quickly.

“Bottom line is this is showing that COVID is still the investor narrative, a lot of today’s movement is driven by the South African variant,” said Greg Bassuk, chief executive officer of AXS Investments in Port Chester, New York.

“We have been talking about four or five factors that have been driving the last couple of months’ activity – inflation fears, some economic data, Fed policy – but what we have seen over the last year is that big developments with respect to COVID really have ended up eclipsing some of those other factors by a substantial degree and that is what is driving today’s market activity.”

On Friday, the WHO called for experts to assess whether this new variant was a “variant that is of concern”. The variant’s impact will be understood over the next few weeks, according to a spokesperson.

Global shares dropped 1.81%, and are on track for the worst week since October early.

Supermax Malaysian Rubber Glove Manufacturer, which saw its stock rise by 1500% during the pandemic’s first wave, soared to 15%.

100 dropped 3.08%, and lost 2.93 percent to reach its lowest level in over a year.

MSCI’s Index of Asian Shares Outside Japan fell 2.43%. This is its largest drop since July. The decline was 2.4%

Oil prices fell in commodities as the market moved away from more risky assets.

At $76.54 per barrel, was the last drop of 6.9%. Last down 7.6% at $72.43 per bar [O/R]

The price of an ounce rose 0.5% to $1,797.44

Investors fled for safer assets as the yen rose 1.58% against the greenback at 113.53 per dollar. Sterling was trading last at $1.333 on Tuesday, up 0.8%.

With the euro at $1.129, it rose by 0.75% and fell 0.49 percent respectively.

Treasuries Benchmark 10-year bonds last saw a rise in the price of Treasuries Benchmark notes to yield 1.514%. Last year, the 2-year note saw a rise in its price and yielded 0.5078%.

Market swings are occurring against the backdrop of growing concerns about COVID-19 epidemics, which have led to restrictions on movement and activities in Europe and elsewhere.

Markets have been positive in the past about the strength and stability of economic recovery despite rising inflation fears.

 

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