Stock market plunges as new coronavirus variant brings travel restrictions

A new coronavirus variant found in South Africa has led to fresh restrictions on travel and has also raised fears of another economic downfall that could be imposed again. As soon as the news of the new variant spread, the stocks across the globe fell and even the oil prices dipped. The S&P 500, which is the Standard and Poor’s 500 (stock market index that keeps a track of 500 large companies listed in the stock exchanges in the United States), faced its worst day since the month of February.

More number of nations including the United States are joining in the move to prohibit travel due to the scare of the new variant. The uncertainty has taken a toll on the stock market that was so far performing at the peak and market watchers have suggested that increased volatility could continue as the countries continue to assess the risk of the new variant. With the discovery of the new mutated virus, it has raised fears that it could be more contagious and could also make the current vaccines less effective. On the other hand the scientists have not yet come up with a conclusion.

Kiran Ganesh a strategist at the UBS Global Wealth Management said that with the market performing so well, the current news of the new variant is certainly not a good news, but given a past with a strong run with low volatility, it cannot be considered as very bad. Ganesh added that it is still too early to judge what the new variant can be capable of.

Talking about the European Stock Market, it fell by 3 to 5 percent while the S&P 500 closed at 2.3 percent lower. Even the Nasdaq composite index fell by 2.2 percent. The stock markets in the United States remained closed on Thursday for Thanksgiving. The thin trading due to the holidays induce the swings.

Photo Credits: Pixabay

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