ASX 200 to fall as Omicron threatens economic recovery

Highlights

  • Australian shares are expected to fall at the open on Monday amid threats to economic recover from Omicron.
  • According to the latest SPI futures, the ASX 200 is expected to open 104 points or 1.4% lower.
  • Brent crude settled down to US$72.72 a barrel, a weekly decline of more than 8%.

Extending last session’s losses, the Australian shares are expected to fall at the open on Monday amid threats to economic recover from the Omicron coronavirus variant cases detected in New South Wales (NSW).

According to the latest SPI futures, the ASX 200 is expected to open 104 points or 1.4% lower. Last Friday, the benchmark fell 1.73%.

The World Health Organization (WHO) on Friday designated a new COVID-19 variant detected in South Africa with a large number of mutations as being "of concern," the fifth variant to be given the designation.

ASX opens lower amid Omicron fears | Top Movers at Opening Trades

 

Wall Street saw a sell-off on Friday as it reopened after Thanksgiving. The Dow Jones fell 2.5%, the S&P 500 dropped 2.3%, and the NASDAQ slipped 2.2%. The Dow had its worst day of the year. US markets closed early on Friday.

European stocks saw their biggest sell-off in 17 months.

Global shares fell 1.81%, their biggest down day in more than a year. France's CAC shed 4.8%. The UK's FTSE dropped 3.6%, while Germany's DAX fell 4.2% and Spain's IBEX lost 5%. The benchmark STOXX 600 index ended 3.7% lower on the day.

MSCI's index of Asian shares outside Japan fell 2.44%.

The countries are considering suspending travel from countries where the new variant has been identified, though the WHO cautioned against hastily imposing such restrictions.

Bond yields

  • 2-year yield: US 0.50%, Australia 0.63%
  • 5-year yield: US 1.16%, Australia 1.33%
  • 10-year yield: US 1.47%, Australia 1.73%, Germany -0.34%

The dollar index fell 0.757%, with the euro was up 1% to $1.1318.

Oil prices fall

Oil prices plunged US$10 a barrel on Friday, their largest one-day drop since April 2020, amid fears over the new variant of the coronavirus.

  • Brent crude settled down to US$72.72 a barrel, a weekly decline of more than 8%.
  • WTI crude settled down at US$68.15 a barrel, declining more than 10.4% on the week.

Gold prices

Gold prices reversed earlier gains seen amid the move away from riskier assets

Spot gold prices were down 0.09%.

Meanwhile, the most-active January iron ore contract on the Dalian Commodity Exchange ended trading 6.7% lower at 575.50 yuan (US$90.06) a tonne.

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