Global Markets End Week With Covid-19 Variant Fear

Global markets operate in decline this Friday (26), in a day of concerns about the advance of Covid-19 in Europe and the emergence of a new variant of the virus – potentially resistant to the vaccine – in South Africa.

The Ibovespa Futuro operated in fall of 2.62%, to 103,642 points, with the dollar rising 1.19%, to R$ 5.63. The S&P 500 Future Index is down 1.78%.

Abroad, the World Health Organization (WHO) announced the emergence of a new strain of Covid-19 in South Africa, called B.1.1.529. The organization highlighted concern about the number of mutations in the new strain, which could increase the chances of vaccines losing effectiveness.

The Fear Index, the VIX, rises more than 40% on these fears, reaching the same level as in February 2021, when the pandemic escalated and led to new lockdowns.

In the United States, futures trade in the fall. In Europe, the Euro Stoxx fell by more than 4%. European stocks are falling, with sectors linked to the reopening of the economy, especially travel and leisure, leading the losses.

News about the new Covid-19 variant also caused stocks in Asia to close in the negative. In Japan, the losses were even greater, with the Chinese government asking Didi, the Chinese Uber, to plan to delist from the exchange. Shares in Softbank, one of Didi’s biggest shareholders, and traded in Japan, fell more than 5% in Tokyo.

Brazil

Coming to Brazil, the risk of the new variant is added to the internal uncertainties. In addition to the fiscal and political risk, iron ore and oil, which had been holding up the Brazilian stock market, are falling. Brent oil drops by almost 6%.

Following the national scenario, the Palácio do Itamaraty informed that it still has no position on the conduct that Brazil should adopt in relation to the new variant of Africa.

In addition, analysts keep an eye on the processing of the PEC dos Precatórios and the solutions that the Federal Government is trying to find to finance the Brazil Aid.

The measure is expected to be voted on next Tuesday. Sources close to senators say that the government may suffer a defeat by the PEC in the Senate, and they are already starting to say that Brazil’s Auxílio could be paid via extraordinary credit. With these impasses, analysts remain pessimistic.

Reference: CNN Brasil

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