Vaccine Shares Soar As Dow Drops 1,000 Points, Oil Tumbles Over New Covid Variant Concerns


Shares of Covid-19 vaccine makers soared Friday as oil and stocks plunged marking their worst day of the year as fears over a new, possibly vaccine-resistant variant of coronavirus sent shockwaves through global markets and triggered new travel restrictions around the world.  

Key Facts

Shares of Moderna, BioNTech and Pfizer—which make some of the most widely used coronavirus vaccines in the western world—jumped 27.8%, 21.9% and 5.6%, respectively, Friday morning. 

Vaccine makers with products undergoing trials or review also fared well, with Novavax shares jumping 10.4%, Inovio Pharmaceuticals 5.3% and Vaxart 4.1%. 

Oil prices fell more than 10%, the asset’s worst day in 2021 and its biggest one-day drop since spring 2020, according to Reuters, with global benchmark Brent crude falling 10.7% and U.S. West Texas Intermediate crude 11.6%. 

Major U.S. market indexes dropped following news of the new variant, with the Dow Jones Industrial Average down 1,000 points or 2.8%, also its worst day of the year, S&P 500 2.2% and Nasdaq 2%. 

Global indexes also fell, with Japan’s Nikkei 225 and Hong Kong’s HSI both dropping more than 2.5% and the FTSE100, France’s CAC40 and Germany’s DAX all down by between 3.6% and 4.9%.

Safe haven assets also benefited from the slump, with gold up 0.6% and yields on U.S. 10 year treasury notes—which run counter to prices—falling to 1.5% from 1.64% before Thanksgiving.   

Key Background

Researchers detected a new variant of coronavirus in South Africa this week, sparking worldwide concern that it might drive new outbreaks and hamper economic recovery and efforts to contain the virus. The variant, B.1.1.529, has a very high number of mutations, including more than 30 on the spike protein, which many vaccines train the immune system to target. Experts believe it could possibly evade the immunity given by vaccines and be more transmissible than other variants circulating, including the highly infectious delta variant. The World Health Organization has convened a meeting to discuss the new strain and governments around the world have moved swiftly to bar travel from parts of the south African region, including the U.K., France, Italy, Germany, Israel and Japan. It has already been identified in parts of Africa, Asia and Europe and appears to be replacing the delta variant and driving a dangerous surge of infections in South Africa’s Gauteng province and Botswana.

What To Watch For

Vaccine maker BioNTech said it is exploring whether the new variant means its vaccine must be altered. It expects more data on this in two weeks, the company said in a statement, Reuters reported. 

Further Reading

Travel Restrictions, Stocks Down: Here’s What To Know About The New Highly Mutated Covid Variant (Forbes)

Heavily mutated coronavirus variant puts scientists on alert (Nature)

Full coverage and live updates on the Coronavirus

The Tycoon Herald