Asian Shares Retreat On Covid-19 Worries

Asian stocks fell on Friday after scientists in South Africa identified a concerning new variant of the coronavirus, whose mutations mark a “big jump in evolution”.

Britain and Israel temporarily banned flights from South Africa and five neighboring countries as a precautionary measure.

Worries about inflation and bets of faster monetary policy tightening in the U.S. also dented sentiment, heading into the weekend.

According to Goldman Sachs Group, the Fed is likely to double the pace at which it tapers bond purchases to US$30 billion a month from January.

Gold was set for its worst week in five months while oil prices fell more than 1 percent in Asian trade on concerns that a global supply surplus could swell in the first quarter.

China’s Shanghai Composite index was down half a percent. A handful of local Covid-19 cases in eastern parts of China have prompted Shanghai city to limit tourism activities and a nearby city cut public transport.

Hong Kong’s Hang Seng index fell nearly 2 percent to trade at 24,264, with casino and beverage shares pacing the declines after two cases of the new strain were found in travelers arriving in the city.

Japan’s Nikkei index was down as much as 2.4 percent at 28,779 as the detection of a new and possibly vaccine-resistant coronavirus variant sent investors scurrying toward the safety of bonds, the yen and the dollar.

Australian markets were headed for their largest weekly drop in nearly two months, with travel stocks taking the beating. The benchmark S&P/ASX 200 was down 1.4 percent to hit a two-week low.

South Korea’s Kospi index was down more than 1 percent while New Zealand’s NZX-50 index dropped 1.4 percent.

U.S. markets were closed overnight for Thanksgiving. European markets closed higher on Thursday as strong U.S. data helped offset concerns over a resurgence of Covid-19 cases in Europe and policy tightening in the U.S.

Minutes of the Fed’s last meeting revealed a hawkish tilt on the board while those from the ECB’s Oct 28 meeting showed an upgrade to the inflation views.

The pan European Stoxx 600 rose 0.4 percent. The German DAX and the U.K.’s FTSE 100 both gained around 0.3 percent, while France’s CAC 40 index added half a percent.

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