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Stocks slip, havens rally as new COVID-19 variant spooks investors -Breaking

© Reuters. FILE PHOTO – Passersby in protective masks reflect on an electronic board that displays stock prices outside of a brokerage during the COVID-19 outbreak. This was taken in Tokyo, Japan September 29, 2021. REUTERS/Issei Kato

Tom Westbrook

SYDNEY – Stocks dropped and fell to their lowest weekly level in over two months, as safe haven assets like bonds rallied. A new virus variant caused concerns about the future and raised U.S. interest rate.

South African scientists discovered that the variant may have been able to bypass immune response and prompted Britain’s urgent introduction of travel restrictions for South Africa.

Futures and Australian dollars fell 1% early in trade. The risk-sensitive Australian dollars and New Zealand dollar dropped 0.4% while futures fell to their lowest levels in three months.

Ray Attrill from National Australia Bank, Sydney’s head of FX strategy said: “The trigger was the news of this COVID variation…and the uncertainty about what it means.” This sort of news is a great opportunity to shoot first, and then get questions answered later.

In early trade, shares in Australia fell 0.6% and was down 1.7% [.T][.AX]

The broadest MSCI index of Asia-Pacific shares was 0.2% lower than the Japan-based benchmark. World stocks fell 0.7% weekly, a record since October.

We don’t know much about this new variant. Scientists told reporters that the new variant has a “very uncommon constellation” mutations. This is concerning as it could be able to evade immune responses and become more transmissible.

British officials believe it to be the most notable variant and are worried that it may resist vaccines.

Tokyo’s open saw sharp moves in Treasuries, as the yields quickly retracted some of their gains. Benchmark yields on 10-year bonds fell five basis points to 1.5927%.

The yen rose by 0.4%, to 114.91 USD and gold rose by 0.2% to $1.792 a ounce. [FRX/][GOL/]

These moves are made against the backdrop of COVID-19 concerns, which have led to restrictions on activity and movement in Europe. The markets also aggressively priced rate increases next year in America.

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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.