Futures for the Dow Jones Industrial Average, oil prices, and Asian stocks suffered on Friday after a new Covid variant was detected in South Africa, raising investor concern.

Dow fell 577 points, while the S&P 500 and the Nasdaq 100 were also in negative territory.

Brent Crude futures extended declines for a third session, falling $1.69 or 2.1% to $80.53 a barrel, while the South African Rand weakened 1.28% against the greenback to 16.1645 per dollar.

It is most likely that oil prices dropped in tandem with broader financial markets on concerns the new variant would hit demand by limiting movements again.

U.K. secretary Sajid Javid already announced the temporary suspension of flights from six African countries due to the variant after a briefing by the World Health Organization.

Markets were closed for Thanksgiving on Thursday, so stocks are coming off of slight gains on Wednesday that staunched the week’s losses for the S&P 500 and the Nasdaq composite.

Asia markets were hit hard in Friday trade, with Japanese stocks leading losses regionally. Travel stocks in Asia-Pacific also fell amid the renewed Covid fears.

The Nikkei 225 in Japan dropped 2.53% to close at 28,751.62, while Hong Kong’s Hang Seng index saw sharp losses, falling 2.2% in afternoon trade.

ABOUT THE VARIANT

The World Health Organization (WHO) is currently monitoring a new variant with numerous mutations to the spike protein, as Covid cases surge globally.

The variant detected in South Africa and neighboring countries in small numbers is called B1.1.529 according to WHO.

Thirty mutations have been detected by South African scientists, which could have implications for vaccine efficacy and transmissibility.

WHAT INVESTORS SAY

“This variant is a new risk for markets. We can’t tell how far it can evade vaccines.” Chief Strategist Takashi Hiroki at Monex, Tokyo

“Keep an eye on the new COVID-19 variant. None of us are virologists, but all of us have seen the impact this has had on the intended path of central bank policy and markets.” – Head of Fixed Income Martin Whetton at CBA, Sydney

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