Stocks

New Covid variant Omicron triggers global alarm, market sell-off

Reuters | | Updated on: Nov 27, 2021
image caption

On Wall Street the Dow Jones Industrial Average was down 2.5%

The discovery of a newcoronavirus variant named Omicron triggered global alarm onFriday as countries rushed to suspend travel from southernAfrica and stock markets on both sides of the Atlantic suffered their biggest falls in more than a year.

The World Health Organisation (WHO) said Omicron may spread more quickly than other forms and preliminaryevidence suggested there is an increased risk of reinfection.

Epidemiologists warned travel curbs may be too late to stopOmicron from circulating globally. The new mutations were first discovered in South Africa and have since been detected in Belgium, Botswana, Israel and Hong Kong.

The United States will restrict travel from South Africa andneighbouring countries effective Monday, a senior Biden administration official said.

Going further, Canada said it was closing its borders tothose countries, following bans on flights announced by Britain,the European Union and others.

But it could take weeks for scientists to fully understandthe variant's mutations and whether existing vaccines and treatments are effective against it.

The variant has a spike protein that is dramaticallydifferent to the one in the original coronavirus that vaccinesare based on, the UK Health Security Agency said, raising fearsabout how current vaccines will fare.

"As scientists have described, (this is) the mostsignificant variant they've encountered to date," BritishTransport Secretary Grant Shapps told Sky News.

South Africa's Health Minister Joe Phaahla called the travelstudies suggested the new variant may be more transmissible.

"This new variant of the Covid-19 virus is very worrying.It is the most heavily mutated version of the virus we have seento date," said Lawrence Young, a virologist at Britain'sUniversity of Warwick.

"Some of the mutations that are similar to changes we'veseen in other variants of concern are associated with enhancedtransmissibility and with partial resistance to immunity inducedby vaccination or natural infection."

Those worries pummelled financial markets, especially stocks of airlines and others in the travel sector, and oil, which tumbled by about $10 a barrel.

Meanwhile, the scramble to ban air travel from southern Africa left hundreds of passengers on two KLM flights from CapeTown and Johannesburg stranded on the tarmac for hours atAmsterdam's Schiphol Airport before they were transferred fortesting.

'Most significant variant'

Several other countries including India, Japan, Israel,Turkey, Switzerland and the United Arab Emirates also toughened travel curbs.

In Geneva the WHO - whose experts on Friday discussed therisks that the variant, called B.1.1.529, presents - had earlierwarned against travel curbs for now.

"It's really important that there are no knee-jerk responseshere," said the WHO's emergencies director Mike Ryan, praisingSouth Africa's public health institutions for picking up the newvariant of the coronavirus that causes Covid-19.

On Wall Street the Dow Jones Industrial Average was down 2.5%, tracking its worst day since late October 2020, andEuropean stocks had their worst day in 17 months asfinancial markets digested the news.

Cruise operators Carnival Corp, Royal CaribbeanCruises and Norwegian Cruise Line plunged morethan 9% each, while shares in United Airlines, Delta AirLines and American Airlines slumped almost 10%.

Too late for travel curbs?

The coronavirus has swept the world in the two years sinceit was first identified in central China, infecting 260 millionpeople and killing 5.4 million.

One epidemiologist in Hong Kong said it may be too late totighten travel curbs against the latest variant.

"Most likely this virus is already in other places. And soif we shut the door now, it's going to be probably too late,"said Ben Cowling of the University of Hong Kong.

Brazilian health regulator Anvisa recommended that travel berestricted from some African countries, but President JairBolsonaro appeared to dismiss such measures.

Bolsonaro has been widely criticized by public healthexperts for his management of the pandemic, railing againstlockdowns and choosing not to get vaccinated. Brazil has theworld's second-highest death toll from the virus, behind onlythe United States.

Discovery of the new variant comes as Europe and the UnitedStates enter winter, with more people gathering indoors in therun-up to Christmas, providing a breeding ground for infection.

Friday also marked the start of the holiday shopping periodhttps://www.reuters.com/markets/europe/fearing-empty-shelves-black-friday-early-birds-head-us-stores-2021-11-26in the United States, but stores were less crowded than inyears past.

Realtor Kelsey Hupp, 36, was at the Macy's department storein downtown Chicago on Black Friday.

"Chicago is pretty safe and masked and vaccinated. I got mybooster so I'm not too concerned about it," she said.

Published on November 27, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you