Asia-Pacific Shares Plunge as New Coronavirus Strain in UK Threatens Global Recovery

by Warrior2

Australian shares fell on Tuesday as a fast-spreading new coronavirus strain in Britain threatened to disrupt a nascent global economic recovery.

The major Asia Pacific stock indexes tumbled on Tuesday, extending a sell-off from multi-year highs hit last week on fears a highly infectious new strain of COVID-19 that hit the U.K. could lead to a slower global economic recovery. Investor sentiment continued to sour even as the U.S. Congress on Monday approved a long-awaited $892 billion coronavirus aid package.

In the cash market on Tuesday, Japan’s Nikkei 225 Index settled at 26439, down 278.03 or -1.04%. Hong Kong’s Hang Seng Index finished at 26090.59, down 216.09 or -0.82% and South Korea’s KOSPI Index closed at 2733.68, down 44.97 or -1.62%.Advertisement

In China, the Shanghai Index settled at 3356.78, down 63.79 or -1.86% and Australia’s S&P/ASX 200 Index finished at 6599.60, down 70.30 or -1.05%.

‘Out of Control’ Covid Strain Makes UK a Global Pariah as Countries Impose Travel Bans

A highly contagious new variant of the coronavirus is causing countries in Europe and elsewhere to block travel from Britain.

The U.K. last week warned of a new coronavirus variant that is thought to be up to 70% more transmissible than the original strain of the disease. According to the World Health Organization (WHO), the new variant has so far been identified in Denmark, the Netherlands and Australia.

Over the weekend, several countries announced plans to shut their borders to Britain. In Europe, France, Germany, Italy, Ireland and the Netherlands have all barred flights from the U.K., while Austria and Sweden are reportedly preparing to do the same.

The German government, meanwhile, suspended all flights from the U.K. from midnight on Sunday. Other countries, including India, Canada and Israel, have also imposed new measures barring flights from the U.K. India will suspend all flights from the U.K. from Wednesday until the end of the year.

Meanwhile, the situation could further complicate Brexit talks. Britain and the European Union remain in deadlock over post-Brexit trade relations as a December 31 deadline looms, with disputes over issues such as fisheries plaguing negotiations.Advertisement

Australia Shares Fall as New Virus Strain Clouds Recovery Hopes

Australian shares fell more than 1% on Tuesday as a fast-spreading new coronavirus strain in Britain triggered travel restrictions all over the world and threatened to disrupt a nascent global economic recovery.

Australia continued its efforts to contain a virus outbreak in its most populous state, New South Wales, which reported its lowest one-day rise in fresh cases in five days amid stringent lockdowns in the affected suburbs.

Energy stocks slumped 2.8% in their biggest drop since October 29, as oil prices sank on border closures in several countries to contain the new virus strain. Woodside Petroleum and Santos lost 3.1% and 3.3%, respectively.

In other news, Australian household spending surged in November as the southeastern state of Victoria was released from lockdown and consumers took advantage of discounts during annual Black Friday sales.

Preliminary retail sales advanced by 7% from the prior month, compared with the 2% gain expected in a survey of economists, data from the Australian Bureau of Statistics showed Tuesday in Sydney.

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