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Monday, March 20, 2023

Asian Stock Market Falls Further After New Virus Variant Spreads

The omicron version of the coronavirus was discovered in several nations Monday, prompting governments to impose travel restrictions.

Tokyo, Shanghai, Hong Kong, and Sydney all fell, though their losses were far lower than Friday’s dramatic drop following reports that the strain initially discovered in South Africa was spreading throughout the world.

The benchmark S&P 500 index plummeted 2.3 percent on Friday, its worst daily loss since February. Banks, oil, and airline stocks were liquidated, and money was transferred into bonds and other safe-haven assets.

In a research, Mizuho Bank’s Venkateswaran Lavanya warned, “Financial market volatility would certainly remain this week.”

The Shanghai Composite Index fell 0.1 percent to 3,561.94, while the Nikkei 225 in Tokyo dropped 0.1 percent to 28,746.49. Hong Kong’s Hang Seng Index fell 0.8 percent to 23,876.74.

The Kospi in Seoul down 0.5 percent to 2,922.25 points, while the S&P-ASX 200 in Sydney fell 0.3 percent to 7,259.20 points. The markets in New Zealand and Southeast Asia were also down.

Although the World Health Organization described the omicron variety as “extremely transmissible,” it is uncertain if it is more harmful than previous variants.

New travel restrictions have been imposed by governments, raising investor concerns about probable failures in managing the epidemic, which has claimed the lives of almost 5 million people since the first instances in late 2019.

Japan’s Prime Minister, Fumio Kishida, declared on Monday that the government’s recent shift in border control rules, which had permitted international business visitors and trainees to enter the country after a long, pandemic-related break, will be halted as of Nov. 30.

The novel variation has been discovered in Hong Kong, Belgium, and Tel Aviv, as well as Johannesburg, South Africa. Travel from Africa has been restricted by the European Union, the United States, and the United Kingdom. Foreigners are not allowed to enter Israel.

Also on Monday, the Japanese government revealed that retail sales in October increased by 1.1 percent over the previous month. Vehicle sales decreased by 6.7 percent.

The S&P 500 index fell 106.84 points to 4,594.62 on Friday. After plummeting more than 1,000 points at one time, the Dow Jones Industrial Average fell 905.04 points, or 2.5 percent, to 34,899.34. The Nasdaq Composite dropped 2.2% to 15,491.66.

Exxon was down 3.5 percent, and Chevron was down 2.3 percent. JPMorgan Chase’s stock declined 3%.

United Airlines has lost 9.6% of its market value, while American Airlines has lost 8.8%.

Vaccine manufacturers reaped the benefits. Pfizer’s stock increased by more than 6%, while Moderna’s stock increased by more than 20%.

Bonds and corporations that benefitted from prior rounds of anti-disease regulations were favored by investors. Zoom Communications, a provider of online meetings, saw its stock rise about 6%.

The omicron variety might make it more difficult for central banks to decide when and how to remove support that is raising stock prices.

Last week, investors were alarmed by notes from the Federal Reserve’s October meeting, which revealed that members were prepared to contemplate hiking interest rates sooner than expected in reaction to increased inflation. The Federal Reserve has previously stated that its first rate rise may not occur until late 2022.

In electronic trading on the New York Mercantile Exchange, benchmark U.S. crude rose $3.70 to $71.85 a barrel, reversing a $10.24 drop on Friday. In London, Brent crude rose $3.38 to $74.97 a barrel.

The dollar jumped to 113.68 yen from 113.19 yen on Friday. From $1.1319, the euro gained to $1.1280.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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