A New Covid Variant Affected Stocks in Asia

There is no lack of factors that have the potential to affect stocks. Stocks in Asia-Pacific declined on Friday, as fears of a new Covid variant influenced investor sentiment.

The World Health Organization (WHO) is monitoring a new variant with “a large number of mutations”. Representatives of the organization will meet on Friday to discuss what it may mean for vaccines and treatments. 

The new variant, called B.1.1.529 has been detected in South Africa in small numbers based  on the information provided by the WHO. This variant comes as Covid cases surge all over the world. In South Africa, local scientists identified more than 30 mutations to the spike protein, the parts of the virus that binds to cells in the body. 

This variant contains multiple mutations associated with increased antibody resistance, which may reduce the effectiveness of vaccines. The B.1.1.529 variant spread rapidly through the Gauteng province, which contains Johannesburg. 

Now it is up to the virus evolution working group to decide what to do with this variant. This group will decide if B.1.1.529 will become a variant of interest or a variant of concern. 

The U.K. made the decision to tackle the B.1.1.529. The country decided to ban flights from six African countries, including South Africa.

Stocks in Asia-Pacific

As previously mentioned, stocks fell in Asia-Pacific on Friday. In Hong Kong, the Hang Seng index dropped 2.67% to end its trading day at 24,080.52. 

In Japan, the Nikkei 225 fell 2.53% to close at 28,751.62. The Topix index dropped 2.01% to 1,984.98.Shares of SoftBank Group plunged 5.19% following a Bloomberg report that authorities in China asked Didi to delist from the U.S. SoftBank Group holds a sizable stake in Didi.

Mainland Chinese stocks declined on Friday. The Shanghai composite dropped 0.56% to finish its trading day at 3,564.09. The Shenzhen component fell 0.342% to 14,777.17.

In South Korea, Kospi declined 1.47% to end its trading day at 2,936.44.

In Australia, the S&P/ASX 200 dropped 1.73% to 7,279.30. Retail sales rebounded in Australia. In October, the country’s retail sales jumped 4.9% month-on-month, seasonally adjusted, according to official estimates released on Friday. Retail sales reached A$31.1 billion ($22.31 billion), extending September’s already strong 1.7% bounce.

The official growth domestic product (GDP) report is out next week and could show a fall of around 3% in the third quarter, though the country’s strong export performance will offset some of the pain.