Markets Plunge Around The World On New COVID-19 Fears

Stock markets around the world are plunging as the discovery of a new COVID-19 variant in South Africa has renewed fears of lockdowns and a downturn for the global economy.

The Dow Jones Industrial Average in the U.S. is down 800 points in pre-market trading, while the S&P 500 and Nasdaq 100 are each down more than 1% before the opening bell.

The downturn comes after the World Health Organization warned of a new COVID-19 variant that’s been detected in South Africa. The United Kingdom has suspended flights from six African countries due to the variant’s discovery.

And the selloff is not limited to stocks. Bond yields tumbled amid the flight to safety. The yield on the benchmark U.S. 10-year Treasury note fell to 1.5380%, a sharp decline after surging above 1.65% earlier this week. Bond yields move inversely to prices.

Oil prices also tumbled, with U.S. crude futures down 6.2% to $73.57 U.S. per barrel, while the South African rand weakened 1.7% against the U.S. dollar to 16.231 per dollar.

Elsewhere in the world, Asian stock markets were hit hard, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng index both falling more than 2% each.

European stocks are having their worst session in more than year, with the benchmark STOXX 600 index down 2.5%. It had slid as much as 3.6% in early trading, while the volatility gauge for the main stock market hit its highest in nearly 10 months.

France's CAC 40 shed 3.3%, leading regional markets lower as shares of plane maker Airbus, shopping center operator Unibail and Safran fell about 10% each. The U.K.'s FTSE 100 dropped 2.6%, while Germany's DAX index fell 2.7% and Spain's IBEX lost 3.4%.

The final weeks of the year are typically a strong period for stock markets, with the so-called "Santa Claus rally" usually creating a happy holiday season for investors. The current market turmoil looks to buck that trend.