Global Markets Alarmed by Omicron Vaccine Concerns

Traders work at the New York Stock Exchange (NYSE) in New York on October 27, 2021.

Brendan McDermid | Reuters

LONDON – Global markets are again alarmed by concerns that a new omicron variant of Covid-19 could potentially avoid vaccinations.

Although health authorities said it would take weeks to get a complete picture of how 30+ omicron mutations affect its response to existing vaccines, Moderna CEO Stefan Bansel told the Financial Times on Monday that he expects them to be less effective against the new strain. Bansel also told CNBC on Monday that it could take months to develop and deliver a vaccine specifically targeting the omicron variant.

Shares in the Asia-Pacific region fell during trading on Tuesday, primarily due to declines of 2.4% for the South Korean Kospi and 1.9% for the Hang Seng index of Hong Kong. Japanese Nikkei 225 fell 1.6%.

European stocks tumbled at the open on Tuesday, but almost completely erased Monday’s gains after the market tried to rebound after sharp global selloffs on Friday. The pan-European Stoxx 600 index fell 1.6% by mid-morning.

In the United States, Dow futures fell more than 550 points in early premarket trading as concerns over vaccine efficacy reversed the surge in sentiment following President Joe Biden’s announcement that economic locks and further travel restrictions are currently out of the question.

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Spot gold prices rose more than 0.5% to more than $ 1,794 an ounce, while the Japanese yen, a traditional safe haven, also rose. The US dollar fell 0.7% against the yen on Tuesday morning to 112.7.

The 10-year Treasury yield fell 10 basis points to 1.4273% at 4:30 am ET. The yield on the 30-year Treasury bond fell 6 basis points to 1.8166%. The yield changes in inverse proportion to prices, and 1 basis point is equal to 0.01%.

In the crypto space, Bitcoin fell 2.75% to $ 56,520. Oil prices also fell, with international benchmark Brent crude falling 3.2% to $ 71.12 a barrel, while US crude fell 2.8% to $ 67.97.

The moves came after European and US stocks attempted to recover on Monday following comments from a South African doctor who raised the alarm over a new option. Dr. Angelica Cootzee said the omicron’s symptoms have been very mild so far.

Charalambos Pissouros, head of research at JFD Bank, said the changes this week show how sensitive market participants are to news headlines about omicron.

“We believe that this will be the main topic for a while. With this in mind, we are very reluctant to say that market concerns have eased and that yesterday’s bounce is the beginning of a long recovery. Any new negative headline has a high chance of leading to another round of mass sales, ”said Pissouros.

Various analysts have warned that there could be an abundance of volatility in the coming weeks, but urged investors to stay on course and focus on unchanging long-term fundamentals.

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