Omicron Covid variant causes global markets to plunge

Stock markets are crashing around the world as nervous investors panic over the announcement of the new coronavirus variant.

Australians are being warned not to panic once the nation’s stock market opens in a few hours’ time as concerns mount over the new Omicron coronavirus variant.

On Friday, the World Health Organisation (WHO) declared the recently-discovered B.1.1.529 strain of Covid-19 to be a “variant of concern” and named it Omicron.

Since then, it has popped up in a number of countries, including Australia after two returned travellers tested positive in NSW, and there are fears that Victoria might also have some more cases lurking.

Stock markets around the world went into free fall since the discovery of Omicron and industry experts are now holding their breath to see what happens once Australia’s market opens at 10am AEDT.

Around the world, shares plunged as investors quickly sold following the news that borders were once again slamming shut because of the virus.

However, one Aussie expert encouraged investors to hold their nerve.

Morning..... #ausbiz#omicron#redredredpic.twitter.com/IhBBjmOZWb

— Evan Lucas (@EvanLucas_INV) November 26, 2021

On Friday, over in the US, the nation’s top 500 companies plummeted to the lowest they’ve been since February while Japan’s entire market closed 2.5 per cent lower.

Hong Kong fared even worse, declining by 2.7 per cent in a single day after the WHO’s announcement.

The European stock exchange ended 3.7 per cent lower while major stock indexes in the UK dropped by 3.6 per cent while both France and Spain recorded a five per cent fall.

Back in Australia, we felt the first shockwaves of Omicron before the weekend, with Flight Centre falling by seven per cent, and Qantas and Corporate Travel Management going down by five per cent as borders closed.

Overall, by Friday afternoon, the ASX 200 was down by 1.7 percent, which CommSec said was the result of “agressive selling”.

The Australian Stock Exchange on Friday. Source: S & P ASX

The UK was the first to ban flights from southern Africa, quickly followed by countries in the European Union and US, while Brazil, Canada, South Korea, Sri Lanka, Thailand, Oman and Kuwait have also imposed restrictions.

On Saturday, Australia tightened its international border to travellers from nine African countries where the new variant of concern has been found.

People arriving from the African nations of South Africa, Lesotho, Botswana, Zimbabwe, Mozambique, Namibia, Eswatini, Malawi, and the Seychelles into any Australian state or territory must undergo 14 days’ quarantine.

Australian now joins Britain, Germany, the Netherlands, South Africa, Botswana, Belgium, Hong Kong and Israel will confirmed infections of Omicron.

Australian Industry Group chief executive Innes Willox encouraged governments not to “overreact” to the Omicron variant as it could have “devastating” impacts on the Australian economy.

“While some caution is understandable, the response to any new and inevitable variant needs to be targeted, proportionate and take into account the nearly 90 per cent of us are vaccinated and tired of lockdowns and border closures,” Mr Willox told The Australian.

“We are just getting our economy back on its feet, but investment and confidence are still uncertain.

“An over-reaction both in terms of timing and proportionality around shutting Australia off from the world, and state from state, would be devastating.”

Investment markets analyst Evan Lucas acknowledged the new strain had caused fears around the global market.

“There’s no doubt it’s a risk,” he told the ABC in regards to Australia’s stock exchange.