Australia stocks fall sharply as new virus variant unnerves investors

11/26/2021 | 01:20am

Nov 26 (Reuters) - Australian shares slumped on Friday to their worst session in nearly two months, as the detection of a new and possibly vaccine-resistant coronavirus variant in South Africa sent energy and other major sectors tumbling.

The benchmark S&P/ASX 200 fell 1.73% in its biggest drop since Oct. 1 despite better-than-expected October retail sales data. For the week, the index lost 1.6% and marked its third straight weekly drop.

Australia said it was investigating the new COVID-19 variant spreading in South Africa and warned it may close its borders to travellers from the African nation if risks from the new strain rise.

"Investors are likely to shoot first and ask questions later until more is known about it," said Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA, referring to the new virus variant.

"There's also a bit of nervousness in the next few weeks as to this expectation of whether we'll get these (Christmas) rallies," said Doug Symes, a senior client adviser at Novus Capital.

Energy stocks slumped 4.6%, their biggest since September 2020, as oil prices tumbled on concerns that a supply surplus could swell in the first quarter following a U.S.-led coordinated release of reserves among major consumers and as the new virus variant spooked investors.

Major oil companies Woodside Petroleum and Santos fell 5.1% and 4.8%, respectively.

Travel stocks were among the biggest losers, with travel management firms Flight Centre Travel Group and Corporate Travel Management falling 7.5% and 5.8% respectively, while Qantas Airways dropped 5.5%.

Miners gave up 1.9% as benchmark Chinese iron ore futures fell 6.4% on concerns over the new COVID-19 variant and new cases in Shanghai.

Sector heavyweights BHP, Rio Tinto and Fortescue Metals Group fell between 1.5% and 3.9%.

Gold miners edged higher 0.4% as investors flocked to safe havens.

New Zealand's benchmark S&P/NZX 50 index dropped 1.3% to 12,628.89 in its worst session since March 22. (Reporting by Harshita Swaminathan; Editing by Subhranshu Sahu)

© Reuters 2021
Copier lien
Latest news about "Economy & Forex"
4m ago
5m ago
6m ago
6m ago
7m ago