Asia equity markets suffer virus backlash

Asian markets slide on Covid variant jitters

The emergence of a heavily mutated new strain of Covid-19 in South Africa, labeled B.1.1.529, has sent Asian investors scurrying for the exit door. The UK has paused flights from South Africa and five other neighbouring countries. We can expect more of the same elsewhere, the complacency seen with the emergence of delta in India being a lesson harshly learned. Two cases with the new variant have already been detected in Hong Kong today. There are also media reports this morning about tightening virus restrictions in parts of China.

Equity markets are being heavily sold including US futures, with OTC markets being closed overnight for the Thanksgiving holiday. S&P 500 futures are 0.85% lower, with Nasdaq futures down 0.70% and growth-centric Dow Jones futures tumbling by 1.25%.

In Asia, the Nikkei has collapsed by 2.75% while South Korea’s Kospi is 1.10% lower. Mainland China is faring slightly better with the Shanghai Composite down 0.45%, and there CSI 300 down 0.35%. Hong Kong is suffering a double whammy today, as China property sector fears also resurface and has sent the Hang Seng into a full-on 2.15% retreat.

Regional markets are faring no better, with Singapore 1.30% lower, and Taipei falling by 0.75%. Kuala Lumpur is down 0.45% with Jakarta 0.50% lower. Manila has fallen 0.80% with Bangkok tumbling by 1.0%. The resource-heavy Australian markets are in full retreat today, as both the ASX 200 and All Ordinaries fall by over 1.30%. This despite a sparkling performance by Australia Retail Sales, which jumped 4.90% m/m for October, due to the reopenings in Melbourne and Sydney.

European markets, already under pressure from the 4th Covid-19 wave sweeping the Eurozone, are likely to feel the stress even more as the timing of a new variant of Covid-19 could not arrive at a worse time for the bloc. US markets may see some resilience in the technology/working from home sectors, but the buy-the-dippers are likely to sit today’s session out.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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