Bump in the world stock markets due to the panic unleashed after the discovery of a new variant of the coronavirus in South Africa, which has also been detected in Belgium. Investor fear spreads in a scenario of restrictions in the Old Continent caused by the increase in infections in recent weeks. The IBEX 35 suffered its own Black Friday on November 26 after closing with a 5% drop (-4.96%), the largest drop in all European parks and its worst day since June 2020, due to fear that the crisis health care may lead to a further deterioration in the global economy. The strain, called B.1.1.529, also arises in a context of limitations and confinements in Europe to face the sixth wave of the pandemic.
Within the Madrid selective, the titles most affected were those of companies related to tourism and mobility. IAG suffered a collapse of more than 15%, Amadeus 8.71% was left and Aena it lost around 9% at the close of the market. Large values also fell such as Santander, which was left more than 8%; Repsol, which lost 7% as did BBVA, while Iberdrola fell 4%; Telephone almost 4%, and Inditex more than 5%.
Investors’ reaction is explained by “risk aversion” to the indication that the pandemic may be reactivated and, with it, economic activity will again paralyze “There is fear because it is not yet known what the degree of transmissibility is of variant B.1.1.529 and flights from South Africa are being banned. Nor is it known what the impact of this new scenario on economic growth may be, “he interprets. Natalia Aguirre, Income 4 analyst, who adds that “investors’ money is fleeing to values considered as safe havens, such is the case of fixed income.”
About the black session lived in the Ibex 35, Pablo de Vicente Hernández, financial advisor at Evolutio Capital Investment, warns of the possibility that it is a day of “temporary panic.” «This Friday’s session transports us to well-known episodes after the identification of the South African variant B.1.1.529 and the warnings about its dangerous spread by the who. To this is added the confinements of recent weeks in Europe and the stoppages in Chinese ports together with the delays in the supply chains, “he says. From Vicente.
The rest of the European stock markets also sank for the doubts that the new variant arouses on how it will impact economic activity. At the close, Paris fell 4.75%; Milan, 4.67%; London, 3.68%, and Frankfurt, 4.22%. In the heart of Europe, the rebound in infections has been worrying for weeks due to the arrival of the cold. The worsening of the health situation and the tightening of measures is already reflected in some indicators, such as consumer and investor confidence in Germany. The setbacks of the last month anticipate a slowdown in economic activity, as warned by International Finalist Analysts (AFI). However, AFI analysts predict that the impact on the economy should be less than in previous waves, given that the measures, at least so far, are not so harsh.
Ben Laidler, global markets strategist at multi-asset investment platform eToro, confirms the thesis that economies and consumers are increasingly resistant to each new wave of viruses. “Although expectations are already low for many of the sectors most affected by the reopening, such as travel and tourism. We see that economic recovery is slowed, not derailed“Laidler says.
South African scientists announced yesterday the detection of a new variant of Covid-19 called B.1.1.529. The danger of this new strain is that it is potentially more contagious and that it contains multiple mutations. The president of the European Commission, Ursula von der Leyen, advanced that Brussels is already studying the possibility of coordinating the ban on flights to or from the southern African region as an emergency measure to prevent the spread of the new variant.
“The Spanish market, which is one of the few that had not recovered the levels prior to the pandemic, shows the specific weakness of the sectors most affected by Covid-19,” he said. Javier Molina, eToro spokesperson in Spain. Molina believes that the reason for the collapse of the Spanish selective must be found in international markets, such as the S&P or the DAX. «Here are the real reasons for these falls that, by correlation, affect the Ibex-35. Price adjustments outside imply adjustments inside that, as they have not accumulated sufficient returns, have an impact on investor sentiment, ”he explains.
This has been the never ending story in the last twelve months, for him IBEX 35, which has suffered like few Stock Exchanges in the world the blow of the new variants. Already with the expansion of the British variant, the Spanish selective plummeted, ending on December 17 of last year, its darkest day after falling 3.08%. A blow from which it was able to recover to fall again after the Christmas holidays and sign the worst month of January of all European parks with a fall of almost 4%, below 7,800 points.
Same story, with the variant explosion Delta in Spain, which once again swept the national stock market. Then, in the week of July 12 to 19, in the midst of an explosion of infections in Spain and with Europe issuing recommendations to its citizens not to travel to Spain, the Ibex touched a 6% drop. Only on July 19 did a 2.40%.
Some precedents that are worrying among analysts, who do not see a clear recovery in the Spanish market in the short term. “The key will be whether or not the vaccine is effective against this new variant. Viruses mutate and this one too, and it seems that the number of mutations is much higher than those produced by the Delta variant. But that doesn’t mean you are immune to the vaccine. Now what you have to do is pay attention to what the companies that manufacture the vaccines say, which are the first interested in clarifying it “, assures Víctor Alvargonzález, founder and advisor of Nextep. “Until then there will be nervousness in the market and general declines, awaiting the verdict of the experts,” this expert abounds.
Slump in Asia
The Black Friday stock market drain began in Asian stocks. The selective Nikkei of the Tokyo Stock Exchange 2.53% was left at the close, after registering setbacks of more than 3% in the worst moments of the session. The benchmark index of the Hong Kong Stock Exchange, the Hang Seng, also closed in the red, with a fall of 2.67%.
On Wall street, the US stock markets also opened with significant falls on Thanksgiving. Thus, the index Dow Jones of Industrials of the New York Stock Exchange, which began the session with a decline of 1.2%, accentuated its fall to 2.71% to trade below 35,000 integers, while the technological Nasdaq it yielded 2.01% and traded at 15,617.86 points.
In addition, the price of a barrel of Brent oil, a reference for the Old Continent, registered a price of 73.43 dollars, after falling 10%, while Texas stood at 68.89 dollars, after falling 6.53%. “Crude has returned to levels last seen in early October and if this risk aversion continues in the coming weeks, there is plenty of room to fall. Although OPEC + probably would have avoided altering production plans next week or in the following months in response to the SPR releases, it may soon feel like its hand is being forced. Next week may be too early, but another major outbreak could slow them down, ”explains Oanda market analyst Craig Erlam.
On the other hand, the price of the euro against the dollar stood at 1.1298 ‘greenbacks’, while the Spanish risk premium stood at 77.1 basis points, with the interest required on the ten-year bond at 0.424 %.