Global Stock Markets Slump, Risk Shunned on New Covid Variant Fears

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FTSE, DAX, PRICES, CHARTS, AND ANALYSIS

• Wall Street is seen opening 730 points lower.
• FTSE 100 and DAX 40 both quoted around 2.5% lower.

The end of the week starts on a bad note with stock markets across the globe hammered lower on fears that a new, highly mutated, form of Covid-19 has been identified in South Africa. While US markets were closed to celebrate Thanksgiving, Asian markets fell with the Nikkei shedding 2.53%, while the HSI fell by nearly 2.7%. All other Asian stock markets recorded losses. In Europe, pre-market quotes suggest that both the FTSE and the DAX will open at least 2.5% lower, while the CAC 40 is seen opening over 3% lower.

The sharp risk-off move was also seen across a range of other asset classes. Gold popped nearly 1% higher to $1,802/oz, both Brent and US crude fell by around 4%, US 10-year Treasuries received a sharp flight-to-safety bid with their yield falling 10 basis points to 1.55% while the VIX – fear gauge - jumped by over 12%

Market conditions remain very volatile with the US equity markets only open for a half-day and while Black Friday is not an official holiday, many US states observe it as a holiday.

The WHO is convening a special meeting today to discuss this new Covid-19 variant and any headlines from this meeting will drive the market. Europe remains in the grips of a fresh Covid-19 outbreak with some countries within the block introducing new lockdown measures. In Germany, the seven-day average of new Covid-19 cases is just under 59,000, an unwanted record, while rates continue to climb across Europe.

FTSE Daily Price Chart – November 26, 2021

DAX 40 Daily Price Chart November 26, 2021

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By Nick Cawley, Strategist, 26th November 2021. DailyFX