|HT|
The rapid spread of the new Omicron strain of coronavirus has not just overwhelmed the healthcare infrastructure across the globe, but also made financial markets in the United States anxious about stagflation - that awful combination of rising inflation and declining growth. The pace at which it is spreading – the strain was discovered in Africa earlier this month and nine countries have now reported cases – threatens to disrupt whatever little normalcy the people have seen in recent months.
The World Health Organization (WHO) has categorised Omicron as a “variant of concern” because of the higher risk of infection and the possibility of vaccine evasion. Several countries, including the US, Canada and the UK, announced restrictions on travel from countries in southern Africa.
As the world moved to control the spread of Omicron, the markets showed immediate reaction to the news. Risk assets sold off, including sharp losses in stocks worldwide. The VIX, often thought of as a “fear index,” surged nine points to more than 27 on Friday. Oil prices fell more than 10 per cent. Meanwhile, yields on US government bonds, including a 16 basis points decline in the 10-year Treasury, registered their biggest one-day move since last year.
(Except for the headline and the pictorial description, this story has not been edited by THE DEN staff and is published from a syndicated feed.)
Comments