Asian markets sank on Friday over fears of a new SARS-CoV-2 variant that scientists warn could be more infectious than Delta and more resistant to vaccines, potentially dealing a heavy blow to the global recovery.
The Omicron strain has been blamed for a surge in fresh cases in South Africa and has already cropped up in Hong Kong, with the WHO designated it a “variant of concern.”
The discovery of the Omicron variant has led the UK and Israel to ban all travel from the country and five others in southern Africa, as officials look to prevent it from taking hold in populations and spreading quickly.
“Early analysis shows that this variant has a large number of mutations that require and will undergo further study,” the WHO said.
The news has hammered confidence in Asian markets, which were already under pressure as traders prepared for the US Federal Reserve to start tightening its monetary policy to fend off surging inflation.
On equity markets, Tokyo, Hong Kong and Mumbai were more than 2 percent off, while Taipei, Sydney, Seoul, Singapore, Bangkok, Manila, Mumbai, Wellington and Jakarta shed more than 1 percent. Shanghai saw more limited losses.
Firms linked to travel were among the worst affected as investors fretted over the possibility that more restrictions will be brought in by governments.
Sydney-listed Qantas Airways Ltd lost more than 5 percent, Hong Kong’s Cathay Pacific Airways Ltd (國泰航空) shed 4 percent and Singapore Airlines Ltd more than 3 percent. Macao casino operators were also hammered in Hong Kong.
The TAIEX fell 1.6 percent to close at 17,369.39, down 2.52 percent for the week.
Tokyo stocks ended sharply lower as news of the variant spooked investors and strengthened the safe haven yen.
The benchmark Nikkei 225 Index managed to trim losses in late trade and ended down 2.53 percent, or 747.66 points, at 28,751.62. The index fell 3.34 percent for the week.
The KOSPI in Seoul lost 1.5 percent to 2,936.44, down 1.2 percent weekly, and Sydney’s S&P/ASX 200 fell 1.7 percent to 7,279.30, down 1.6 percent for the week.
India’s SENSEX retreated 2.9 percent to 57,107.15, down 4.2 percent for the week. New Zealand and Southeast Asian markets also declined.
The broader TOPIX slipped 2.01 percent, or 40.71 points, to 1,984.98. It fell by the same percentage for the week.
Investors feared that the latest plunge might trigger a global market rout that might continue next week, Okasan Online Securities said in a note.
Additional reporting by AP, with staff writer
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