Peter Nurse 

Investing.com – European stock markets are expected to open sharply lower Friday on concerns a new Covid variant will prompt fresh mobility restrictions, hindering the region’s economic recovery.  

At 02:05 PM ET (0705 GMT), Germany’s contract traded at 2.3% less, France fell 2.6%, while in Britain the contract was down 2.3%.

In Europe, virus cases rose rapidly in the past month. Many countries have implemented stricter Covid policies. But a degree of urgency was added to the situation by the announcement late Thursday by the World Health Organization that it’s monitoring a new Covid-19 variant with “a large number of mutations”, detected mainly in southern Africa. 

On Friday, the United Nations agency will hold an emergency meeting to address the consequences of vaccines or treatments based on the extent of mutation in the original strain. The U.K. announced that it would temporarily ban flights from several southern African countries, and placed travelers in quarantine.

The European markets received a negative handover from Asia on the news, with Japan’s dropping 2.5%, Hong Kong’s down 2.2% and South Korea’s Kospi falling 1.4%. The region’s airline stocks were particularly hard hit, and this sentiment is likely to translate into hefty losses in the travel sector when Europe opens.

Wall Street closed on Thursday in celebration of Thanksgiving and will close Friday morning early due to a shorter session. The U.S. stock markets are expected to open at a lower level, with the contract closing 600 points below. 

We don’t yet know the severity of the disease. It’s still a mystery. Markets are anticipating the risk here of another global wave of infections if vaccines are ineffective,” said Moh Siong Sim, an analyst with the Bank of Singapore, Reuters reported. 

“Reopening of hopes may be a futile endeavor.”

Crude oil prices fell Friday after the release of Covid-19, a new strain that raises concerns over demand. This is just as an alliance of large consumers led by the United States adds to global supply.

Worries are growing that this will result in a global supply surplus in the first quarter, and brings next week’s meeting of the Organization of the Petroleum Exporting Countries, Russia and allies, a group known as OPEC+, firmly into focus

This group will decide whether to increase output by another 400,000 barrels daily in January or decrease supply.

Futures were trading 3.4% less at $75.78 per barrel by 2:05 PM ET. Contracts fell 2.7%, to $80.03.

Furthermore, the price of gold rose by 1% to $1801.80/oz while it traded 0.2% lower at 1.1229.