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Virologists are racing to learn more about a variety of the Coronavirus that was discovered in Botswana. This variant is fast outcompeting other variants of the virus in the Johannesburg region of South Africa.
The variety, now known as B.1.1.529, is said to have twice as many mutations as the Delta version, which became the prevalent form throughout much of the world during the summer.
The South African rand plummeted dramatically against the dollar on Friday after a new variety with several mutations was discovered in the nation.
During Asia trading hours on Friday, the currency plummeted as low as 16.2391 per dollar and was last trading approximately 1.6 percent down at 16.2215 per dollar.
The losses occurred as investors fled to safe-haven currencies such as the Japanese yen, which rose 0.6 percent versus the US dollar to 114.69 per dollar. The US dollar index, which measures the greenback’s strength versus other currencies, was at 96.712, up from depths below 96.5 earlier this week.
According to one currency analyst on CNBC’s “Street Signs Asia” on Friday, the significant shift in the rand may be attributable in part to fewer deals being conducted during Asia hours.
“This fundamental news of the new version in [South] Africa, along with limited liquidity in Asia, is undoubtedly driving some of that price activity,” said Adarsh Sinha, co-head of Asia rates and foreign currency strategy at Bank of America Securities.
Dow Jones Industrial Average futures slid 756 points or 2.11 percent. The S&P 500 futures fell 1.6 percent, while the Nasdaq 100 futures fell 0.9 percent. Because of the Thanksgiving holiday, trading in the United States is truncated on Friday, with markets shutting at 1 p.m. ET.
The declines followed a warning from WHO experts on Thursday about a new Covid-19 strain discovered in South Africa. The new variety has more changes in the spike protein, the viral component that interacts to cells, than the highly infectious Delta form. Scientists are concerned that these alterations would lead to increasing vaccination resistance, while the WHO has said that further research is needed.
Bond prices surged as yields fell in a run to safety. The yield on the benchmark 10-year Treasury note in the United States declined 13 basis points to 1.511 percent (1 basis point equals 0.01 percent ). This was a significant turnaround from earlier in the week, when yields soared to above 1.68 percent at one point. Bond yields move in the opposite direction of bond prices.
Oil prices fell as well, with US crude futures down 6.2 percent to $73.57 per barrel and the South African rand falling 1.7 percent to 16.231 per dollar.
Asia’s markets were battered on Friday, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng indexes both plunging more than 2%. Bitcoin dropped by 8%.
Travel-related companies were hit the hardest, with Carnival Corp. and Royal Caribbean both down more than 10% in premarket trade. United Airlines, Delta Air Lines, and American Airlines all had losses of more than 7%. Boeing’s stock dropped 6%. Marriott International and Hilton Worldwide both dropped more than 5%.
Bank stocks fell on expectations of a slowdown in economic activity and a drop in interest rates. Bank of America, Goldman Sachs, and Citigroup all fell more than 4%.
Industrials connected to the global economy fell by 3%, headed by Caterpillar. Dow Jones Industrial Average fell 2%.
Chevron fell nearly 5% as energy companies reacted to the decrease in oil prices.
On the other hand, investors flocked to vaccine manufacturers. Moderna’s stock increased by more than 8%. Pfizer’s stock increased by 5%.
Some of the stay-at-home bets that had arisen in the early months of the epidemic had risen again. Zoom Video increased by 9%. Netflix increased by 2%.