Covid Live Updates: W.H.O. Says New Variant in South Africa Is ‘of Concern’
Several countries, including the United States, announced restrictions on travelers from southern Africa in an effort to contain the new Omicron variant, which has mutations that may make reinfection more likely.
Stocks around the world tumbled on Friday, with the S&P 500 logging its worst day since February, and oil prices plunged, after evidence of a new coronavirus variant in South Africa prompted some countries to reinstate travel restrictions and reignited concerns about the economic toll imposed by the pandemic.
The number of mutations in this new variant has raised fears that it could be especially contagious and render current vaccines less effective. But scientists haven’t come to firm conclusions yet.
“Where the market is selling off so dramatically is a product of, ‘yes, this is bad news,’ but also the fact that we have had a pretty strong run with relatively low volatility for a while,” said Kiran Ganesh, a strategist at UBS Global Wealth Management. “It’s still too early to really judge what this, this variant, is going to do.”
The S&P 500 closed 2.3 percent lower and the Nasdaq composite index dropped 2.2 percent. European stock markets fell 3 to 5 percent.
U.S. stock markets were closed on Thursday for the Thanksgiving holiday and closed early on Friday. Thin trading because of the holidays can exacerbate the swings.
Friday’s decline pulled the benchmark S&P 500 down further from a record high reached just last week. Amid supply chain disruptions and shortages of goods and workers in some sectors, investors have been preoccupied by rising prices and expectations about central banks withdrawing stimulus to combat inflation.
But the emergence of a new variant abruptly shifted their focus back to the core woes of the pandemic. A fourth wave of the virus in Europe has already led to a tightening of restrictions, including some lockdowns.
“The pandemic and Covid variants remain one of the biggest risks to markets, and are likely to continue to inject volatility,” Keith Lerner, a strategist at Truist, wrote in a note to clients.
Mr. Lerner argued that the sell-off wasn’t overdone considering the heights at which stocks have been trading. “We are not making any changes to our investment guidance at this point,” he wrote, adding that consumers and companies are much more adept at dealing with virus restrictions now.
Futures of West Texas Intermediate oil, the U.S. crude benchmark, plummeted more than 13 percent to $68.04 a barrel, the lowest since early September. The price of oil has been especially sensitive to virus restrictions that keep people at home. The drop comes just three days after United States and five other countries announced a coordinated effort to tap into their national oil stockpiles, to try to drive down rising gas prices.
Brent futures, the European benchmark, fell 11 percent to about $73 a barrel. But Mr. Ganesh said UBS forecasts that the price will to rise to $90 a barrel by March, partly in the expectation that the fears about new virus restrictions will be temporary.
Demand for the relative safety of government bonds jumped, pushing their prices up and their yields down. The yield on the 10-year U.S. Treasury plunged 15 basis points, or 0.15 percentage points, to 1.48 percent, the biggest single-day drop since March 2020. The yield on Germany’s bund, Europe’s benchmark bond, fell 9 basis points to minus 0.34 percent.
In an echo of the market fluctuations of last year, stocks that flourished under lockdowns and quarantines rose, including Zoom and Peloton. Companies vulnerable to travel restrictions, like Carnival, the cruise company, and Boeing, the plane maker, fell.
In Asia, the Nikkei 225 in Japan closed 2.5 percent lower and the Hang Seng Index in Hong Kong declined 2.7 percent.
In Europe, energy stocks led the markets lower. The Stoxx Europe 600 index closed down 3.7 percent. The FTSE 100 in Britain dropped 3.6 percent, while major stock indexes in France and Spain fell about 5 percent.
As several countries including Britain and France rushed to restrict flights from South Africa and other African nations, airline stocks dropped. IAG, the parent company of British Airways, fell nearly 15 percent, the biggest decline in the FTSE 100.
“This fresh fall in confidence is the last setback the industry needed given that it’s already faced with lockdowns in Europe,” Susannah Streeter, an analyst at Hargreaves Lansdown, wrote. “It’s going to take much more than a discounted ticket to calm nerves and restore optimism.”
Someday, I may appreciate the irony in this situation.
For now, I’m in my fourth hour trapped on the tarmac at Amsterdam’s Schiphol Airport, where officials will not allow so much as a catering truck to bring us water. And an appreciation for irony is elusive.
My flight took off nearly 16 hours ago from Johannesburg, where people were abuzz with the news of the discovery of a coronavirus variant that is spreading in South Africa.
This variant has many mutations, in particular on the spike protein that helps it enter human cells, and is spreading relatively quickly around Johannesburg.
South Africa’s National Institute for Communicable Diseases shared what it knew midday on Thursday, and before I even took off, Britain had banned flights from southern Africa. Europe apparently panicked while I was somewhere over the Sahara; by the time we landed, we were told we would not be permitted off the plane.
The irony lies in the fact that I was in South Africa to report on the risk of variants emerging in countries with low vaccination coverage — and on the impressive, multilayered approach South Africa is using to try to protect global public health. I spent time in the labs of the same scientists who, yesterday, made the announcement that has left me hostage with a planeload of strangers while “the authorities” somewhere debate what to do with us.
Everyone on this flight had to show proof of a negative Covid test; most, it seems, are fully vaccinated, as I am. (We’ve all had time to chat.)
The prevailing sentiment among these restive, and thirsty, people is that South Africa is being punished for having some of the world’s most advanced study of infectious disease, a legacy of its battle with H.I.V. — and for being transparent, quickly, about what it learns.
Passengers are reading aloud to each other from news stories that say Europe intends to put us all into mandatory 14-day quarantine, regardless of our vaccination status or test results.
From our windows we can see a flight from Cape Town, also parked out here, stuck in limbo.
For now, I have plenty of time to make my way through the mountain of research that South African scientists shared with me.
The Hong Kong government said on Thursday that it had detected two cases of a new variant identified in South Africa, which scientists have warned shows a “big jump in evolution” and could limit the effectiveness of vaccines.
The infections were detected in a man who had returned to Hong Kong from South Africa this month, and later in another man staying across the hall in the same quarantine hotel. (Hong Kong requires almost all overseas arrivals to quarantine in hotels for two to three weeks.) The virus’s genetic sequence was identical in both men, suggesting airborne transmission, according to the city’s Center for Health Protection. Both men were vaccinated.
Further sequencing by the University of Hong Kong confirmed that the viruses belonged to the new variant from South Africa, officials said, though they acknowledged that information about the variant’s public health impact was “lacking at the moment.”
Some Hong Kong experts have questioned the length and efficacy of Hong Kong’s quarantines, noting that officials have recorded several cases of residents in quarantine hotels apparently infecting people who were staying in other rooms.
In the case of the latest variant infections, the government has blamed the first man for not wearing a surgical mask when opening his hotel room door, as well as “unsatisfactory air flow” in the hotel. As of Friday afternoon there had been no reports of infections in nearby rooms.
The presence of the new variant may complicate efforts to reopen the border between Hong Kong and mainland China. For months, Hong Kong officials have said that resuming quarantine-free travel between the Chinese territory and the mainland — virtually the only places in the world still pursuing a containment strategy that seeks full eradication of the virus — is their top priority, even though the strategy has damaged the city’s reputation as a global finance hub.
Mainland officials have said that Hong Kong is not doing enough to control the virus, even though the city has recorded just two locally transmitted cases in the last six months. The mainland has recently faced new domestic outbreaks; on Thursday, the National Health Commission there reported four new local cases.
On Thursday evening, Hong Kong’s No. 2 official, John Lee, said mainland officials had told him earlier in the day that Hong Kong had “basically fulfilled” the conditions to reopen the border. He said details would still need to be worked out, including the introduction of a mainland-style “health code” app that has raised privacy concerns.
Asked by a reporter whether the new variant would delay reopening with the mainland, Mr. Lee said only that the Hong Kong authorities would “ensure that adequate research and tracking are done in this regard.”
“Of course, we must manage and control any new risks,” he said.
The new variant that emerged in southern Africa could pose “a substantial risk to public health,” Britain’s health secretary, Sajid Javid, said on Friday, explaining a British decision to suspend flights and place six African countries on a quarantine list.
“This new variant is of huge international concern,” Mr. Javid said in a statement to Parliament while adding that no cases have yet been detected in the U.K.
Mr. Javid described the situation as fast moving and said there was a high degree of uncertainty around the spread of the virus and its possible impact. But he suggested that the signs were worrying.
“Early indications show that this variant may be more transmissible than the Delta variant and current vaccines may be less effective against it,” he said.
Late on Thursday Britain said it was suspending flights temporarily from South Africa, Botswana, Lesotho, Eswatini, Namibia and Zimbabwe. When they start up again, British and Irish citizens returning from these countries will be required to quarantine in government-approved hotel facilities.
Mr. Javid said that assessments were being made of the situation in other nations with strong travel links to South Africa, suggesting that the list of so-called “red list” countries could grow.
“The sequence of this variant, currently called B.1.1.529, was first uploaded by Hong Kong from a case of someone traveling from South Africa,” Mr. Javid said. “Further cases have been identified in South Africa, in Botswana, and it is highly likely that it has now spread to other countries.”
Early in the pandemic the British government was criticized for delaying the introduction of its quarantine system and the swiftness of Thursday’s move reflects a desire not to repeat that mistake.
“One of the lessons of this pandemic is that we must move quickly and at the earliest possible moment,” said Mr. Javid.
Speaking for the opposition Labour Party, Alex Norris welcomed the move but said that the emergence of the new variant reflected the “failure of the global community to distribute the vaccine” around the world.
Nearly 20 months after pandemic lockdowns first began, governments across Europe are beginning to tighten restrictions again amid the latest wave of new coronavirus cases, threatening the gains that the region has made against the pandemic.
France is racing to offer booster shots to all adults and will not renew health passes for those who refuse. Deaths are rising in Germany, with its 68 percent vaccination rate, a worrying trend for a highly inoculated country. Austria has been in a nationwide lockdown since Monday, and made vaccinations mandatory.
In Eastern Europe, where far-right and populist groups have fueled vaccine skepticism, vaccination rates are lower than the rest of the continent. Bulgaria, where a quarter of the population is fully vaccinated, is turning back to shutdowns or other restrictive measures.
The quickly deteriorating situation in Europe is worrisome for the United States, where the seven-day average of new cases has risen 24 percent in the past two weeks. (The number of new deaths reported in the United States is down 6 percent.) Trends in new cases in the United States have tended to follow Europe by a few weeks.
“Time and again, we’ve seen how the infection dynamics in Europe are mirrored here several weeks later,” Carissa F. Etienne, director of the Pan American Health Organization, told reporters on Wednesday. “The future is unfolding before us, and it must be a wake-up call for our region because we are even more vulnerable.”
The White House insists that while new infections are on the rise, the United States can avoid European-style lockdowns.
“We are not headed in that direction,” Jeff Zients, the White House coronavirus response coordinator, said this week. “We have the tools to accelerate the path out of this pandemic: widely available vaccinations, booster shots, kids’ shots, therapeutics.”
But the chief of the World Health Organization, Tedros Adhanom Ghebreyesus, said that some countries had lapsed into a “false sense of security.”
He issued a warning during a news briefing on Wednesday: “While Europe is again the epicenter of the pandemic, no country or region is out of the woods.”