Equities, oil prices, U.S. Treasury yields all drop on COVID variant fears

Shafaq News / Shares tumbled on Wall Street on Friday as they reopened after Thanksgiving, while European stocks saw their biggest sell-off in 17 months and oil prices plunged by $10 per barrel as fears over a new coronavirus variant sent investors scurrying to safe-haven assets.

The World Health Organization (WHO) on Friday designated a new COVID-19 variant detected in South Africa with a large number of mutations as being "of concern," the fifth variant to be given the designation.

Unofficially, the Dow Jones Industrial Average closed down 2.53% at 34,899.34 in its largest percentage drop in more than a year. The S&P 500 lost 2.27%, its worst one-day drop since Feb. 25, and the Nasdaq Composite dropped 2.23%, the biggest one-day route in two months.

U.S. markets closed early on Friday after being shut all day on Thursday for the Thanksgiving holiday.

The benchmark STOXX 600 index ended 3.7% lower on the day, leaving it down 4.5% for the week. The volatility gauge for the main stock market hit its highest in nearly 10 months.

Companies that had benefited from an easing of COVID-related restrictions this year, including AMC Entertainment, plane engine maker Rolls Royce, easyJet, United Airlines and Carnival Corp all fell.

Retailers dropped as Black Friday, the start of the holiday shopping season, kicked off as the new variant fuelled concerns about low store traffic and inventory issues.

In Europe, the travel and leisure index (.SXTP) plummeted 8.8% in its worst day since the COVID-19 shock sell-off in March 2020.

In commodities, oil prices plunged. Gold prices reversed earlier gains seen amid the move away from riskier assets.

U.S. crude was last down 12%, at $69.02 per barrel by 1:21 p.m. EST (1812 GMT). Brent crude dropped 10.5% to $73.59.

Spot gold prices were down 0.09%.

As investors dashed for safe-haven assets, the Japanese yen strengthened 1.87% versus the greenback, while sterling was last trading at $1.3331, up 0.08% on the day.

The dollar index fell 0.757%, with the euro up 1% to $1.1318.

U.S. Treasury debt yields posted their sharpest drop since the pandemic began. Treasuries benchmark 10-year notes last rose to yield 1.4867%. The 2-year note last rose to yield 0.4941%, from 0.644%.

The market swings come against a backdrop of already growing concern about COVID-19 outbreaks driving restrictions on movement and activity in Europe and beyond.

Markets had previously been upbeat about the strength of economic recovery, despite growing inflation fears.

Source: Reuters