Asian Shares Slump On New Covid Variant Concerns

Asian stocks slumped on Friday as the detection of a new and possibly vaccine-resistant coronavirus variant in South Africa hit global risk sentiment.

The new variant has been red-flagged by scientists over an alarmingly high number of spike mutations that might make the virus more resistant to vaccines.

Chinese shares ended lower as a handful of local Covid-19 cases in the eastern parts of China prompted Shanghai to limit tourism activities and a nearby city to cut public transportation services.

The benchmark Shanghai Composite Index slid 20.09 points, or 0.6 percent, to 3,564.09, dragged down by semiconductor-related and energy stocks. Hong Kong’s Hang Seng Index plummeted 659.64 points, or 2.7 percent, to 24,080.52.

Japanese shares hit a one-month low and the safe-haven yen rallied, as fears of a new coronavirus variant raised fears about the global economic outlook.

The Nikkei 225 Index plunged 747.66 points, or 2.5 percent, to 28,751.62, closing below 29,000 for the first time in about a month. The broader Topix ended down about 2 percent at 1,984.98, with selling seen across the board.

Rail companies suffered heavy losses, with Central Japan Railway, Western Japan Railway and Keisei Electric Railway losing 3-6 percent. All Nippon Airways parent ANA Holdings plummeted 4.5 percent after raising funds through a sale of convertible bonds.

Softbank Group lost 5.2 percent on a Bloomberg report that Beijing has asked Chinese hailing giant Didi to delist from New York due to concerns about data security. The Japanese conglomerate is a large investor in U.S.-listed Chinese tech firms, including Didi and Alibaba.

Australian markets suffered their sharpest drop in nearly two months as worries about the new South African Covid variant overshadowed better than expected October retail sales data.

The benchmark S&P/ASX 200 Index tumbled 128 points, or 1.7 percent to 7,279.30, marking its biggest drop since October 1. The broader All Ordinaries Index ended down 137 points, or 1.8 percent, at 7,599.90.

Energy stocks had their worst session since September 2020 as oil prices tumbled amid fresh demand fears and concerns about oversupply. Oil Search, Woodside Petroleum and Santos fell about 5 percent each.

Travel stocks such as Qantas Airways, Corporate Travel Management and Flight Centre Travel lost 5-7 percent after authorities warned the country may have to close its borders to travelers from the African nation if risks from the new strain rise.

Gold miners Evolution and Newcrest rose about 1 percent each as investors flocked to safe havens, including gold.

Seoul stocks extended losses for the fourth day running as the coronavirus evolves and spreads with worrying mutations.

The Kospi slumped 43.83 points, or 1.5 percent, to close at 2,936.44, dragged down by chemical and tech heavyweights. Banks bucked the weak trend, a day after the country’s central bank raised its policy rate to 1 percent.

New Zealand shares also fell, with the benchmark NZX 50 Index dropping 165.72 points, or 1.3 percent, to 12,628.89 in its worst session since March 22.

Travel stocks paced the declines, with Air New Zealand and Auckland International Airport ending down 2.5 percent and 2 percent, respectively. Stride Property Group gave up 5 percent after completing a capital raise.

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