Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on October 27, 2021.
Brendan McDermid | Reuters
LONDON – Global markets were again rocked by concerns that Omicron’s new Covid-19 variant could potentially bypass vaccines.
Although health officials have announced that it will take several weeks to get a full picture of how Omicron’s 30+ mutations will affect response to existing vaccines, Moderna CEO Stephane Bancel told Financial on Monday Times that he expected them to be less effective against the new strain.
Bancel also told CNBC on Monday that it could take months to develop and ship a vaccine specifically targeting the Omicron variant.
Asia Pacific stocks fell during Tuesday’s trading, led by declines of 2.4% for South Korea’s Kospi and 1.6% for Hong Kong’s Hang Seng index. The Japanese Nikkei 225 also lost 1.6%.
European stocks fell Tuesday morning, almost wiping out Monday’s gains after the market tried to rebound after Friday’s sharp global sell-off. The pan-European Stoxx 600 index lost 1.2% by mid-morning.
In the United States, Dow futures lost more than 480 points in pre-trading hours as vaccine efficacy concerns reversed sentiment following President Joe Biden’s contention that economic bans and other travel restrictions were now off the table.
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The spot gold price rose more than 0.7% to more than $ 1,797 an ounce, while the Japanese yen, another traditional safe haven, also rose. The dollar was down 0.6% against the yen at 112.8 on Tuesday morning.
The benchmark ten-year government bond yield fell 10 basis points to 1.4273% at 4:30 p.m. ET. The 30-year government bond yield fell 6 basis points to 1.8166%. The returns move inversely to the prices and 1 basis point equals 0.01%.
In the crypto space, Bitcoin fell 2.35% to $ 56,752.70. Oil prices also fell, with the international benchmark Brent crude falling 2.7% to $ 71.43 a barrel and US crude falling 2.4% to $ 68.27.
The move comes after European and US stocks attempted a recovery rally on Monday after comments from the South African doctor who raised the alarm about the new variant. Dr. Angelique Coetzee said Omicron’s symptoms so far have been extremely mild.
Charalambos Pissouros, head of research at JFD Bank, said the week’s moves so far had shown how sensitive market participants are to Omicron headlines.
“We believe this will be the main theme for a while. With that in mind, we are very reluctant to say that market concerns have subsided and that yesterday’s rebound is the beginning of a long-lasting recovery. Any new negative headline” has a high chance of being to lead another massive sales line, “said Pissouros.
Various analysts have warned that volatility could increase in the coming weeks, but urged investors to stay on course and continue to focus on unchanged long-term fundamentals.