European stocks suffer worst day in 17 months on fears over new variant

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The European stock market fell sharply amid widespread sales on Friday (26), after news of a newly identified and possibly vaccine-resistant new coronavirus strain sparked fears of a new impact on the global economy and prompted investors to avoid risky assets.

The FTSEurofirst 300 index fell 3.71% to 1,796 points, while the pan-European STOXX 600 index lost 3.67% to 464 points, in its worst session since June 2020.

The volatility measure for the main stock market reached a 10-month high.

The day’s losses led the STOXX 600 to record a 4.5% drop this week.

Little is known about the variant detected in South Africa, Botswana and Hong Kong, but scientists said it has an unusual combination of mutations and may be able to evade immune responses and be more transmissible.

“With Europe and some parts of the northern US in trouble due to an already high number of new cases and hospitalizations, this new strain of the virus comes at the worst possible time,” said Peter Garnry, head of equity strategy at Saxo Bank.

“The stocks are reacting negatively because it is not known at this time how effective the vaccines will be against the new strain, and therefore this increases the risk of further lockdowns.”

Across industries, travel and leisure tumbled 8.8%, on its worst day since the start of the Covid-19 crash in March 2020.

The UK announced a temporary ban on flights from South Africa and several neighboring countries. The European Union is also planning a similar move.

See how the European market turned out in the last session this week:

  • In London, the Financial Times index retreated 3.64%, to 7,044 points;
  • In Frankfurt, the DAX index fell 4.15% to 15,257 points;
  • In Paris, the CAC-40 index lost 4.75%, to 6,739 points;
  • In Milan, the Ftse/Mib index had a devaluation of 4.60%, to 25,852 points;
  • In Madrid, the Ibex-35 index dropped by 4.96% to 8,402 points;
  • In Lisbon, the PSI20 index fell 2.44%, to 5,425 points.

Reference: CNN Brasil

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