Economy

US stocks dive sharply as new virus variant rattles global markets

VIX volatility up 40% with uncertainty, risk of lower oil demand cause 7% loss in crude prices

Ovunc Kutlu   | 26.11.2021
US stocks dive sharply as new virus variant rattles global markets FILE PHOTO

ANKARA

Major indices in the US stock market took a nosedive at opening bell on Friday, as a new coronavirus variant has rattled global markets and caused a major selloff.

The blue-chip Dow plummeted 891 points, or 2.5%, to 34,912 at 9.53 a.m. EDT, while the S&P 500 fell 82 points, or 1.76%, to 4,618.

Tech-heavy Nasdaq decreased 198 points, or 1.25%, to 15,645.

The steep decline came amid fears that a new coronavirus variant known as B.1.1.529 in South Africa could prompt quarantine measures, closure of businesses, and halt economic recovery around the world once again.

Growing fear rattled markets around the world on Friday, as Asian indices lost around 2%, while European stock exchanges fell more than 3%.

Amid heightened uncertainty, the VIX volatility index, known as the fear index, jumped almost 40% to 25.84 at the time.

The dollar index was down 0.6% to 96.21, while the yield on 10-year US Treasury notes fell 7.8% to 1.516%.

With the potential risk of lower global oil demand due to the new variant, oil prices plummeted around 7%. Price of Brent crude fell 6.9% to $76.58 a barrel and the US benchmark West Texas Intermediate crude lost 7.8% to $72.29.

Precious metals were mixed but investors rushed to gold as a safe haven asset, which rose 0.63% to $1,800 an ounce. Silver, however, was down 1% to $23.36 an ounce.

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