UPDATE 1-South African markets tumble on new COVID-19 variant

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JOHANNESBURG, Nov. 26 (Reuters) – The South African rand fell below 16.00 to the dollar for the first time this year on Friday as investors became jittery over the discovery of a significant coronavirus variant in the country, as government bonds and equities plummeted .

The fall in inventories was driven by a sharp drop in hospitality stocks as Britain and some other countries restricted travel to South Africa and neighboring countries.

Britain also said that, because of mutations, the virus variant was considered by scientists to be the most significant found to date.

“Risk-off trading as new COVID-19 variant in South Africa may be the Grinch that steals Christmas,” analysts at ETM Analytics said in a note.

“Momentum was already on the upside for the USD due to its positioning for more aggressive (Federal Reserve) monetary tightening in the coming months, and the discovery of this new variant… will seriously affect the ZAR’s resilience against this broader USD move.” Reduce.”

At 0725 GMT, the rand was trading at 16,2200 against the dollar, 1.52% weaker than its previous close.

In fixed income, the return to maturity of the 2030 benchmark increased by 24.5 basis points to 9.97%.

South African scientists said Thursday they had discovered a new 19 variant with a “very unusual constellation” of mutations, which were worrisome because they could help evade the body’s immune response and make it more transmissible.

In the stock market, both the Top-40 index and the broader stock fell nearly 2% in early trading.

The biggest losses were City Lodge Hotels, down 20%.

Shares in Sun International, the owner of casinos and hotels including the Sun City Resort, fell nearly 14% and while shares in Tsogo Sun Hotels fell more than 11%. (Reporting by Olivia Kumwenda-Mtambo; editing by Shailesh Kuber and John Stonestreet)

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