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Airlines And Travel Stocks Plunge By 3-6%, Amid New B.1.1.529 Covid Variant Concerns

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Airlines and travel and leisure stocks were hammered hard sharply on November 26, Friday as concerns over a new Covid variant namely B.1.1.529 have been detected in South Africa. The new variant threatened to derail the travel segment's recovery, at a time when the sector has just started to get a push. Investors are worrying that the new variant could be highly transmissive and vaccine-resistant.

 

Fall in travel stocks

Fall in travel stocks

The stocks approximately plunged by 3%-6%, when the market opened in the morning. Investors anticipated that the governments can impose new restrictions on travel and tourism if the new Covid variant spreads fast. In that case, the sector will be affected again, leaving the trading bars in red.

Yesterday, the union government requested the states and UTs to conduct stringent screening and testing of all international travelers who have arrived from or transiting through South Africa, Hong Kong, and Botswana, places where the B.1.1.529 variant has been reported.

Today, the equity markets in India have fallen nearly 2%, while the Sensex dropped 1,700 points and the Nifty closed by dropping 510 points. The Sensex reportedly plunged to a 3-month low level and experienced the biggest fall in the last 7 months.

Fall in the global equity markets
 

Fall in the global equity markets

In London, the FTSE 100 share index fell by 2.6%, along with markets in Germany and France, and in Asia. The FTSE 100 index opened sharply down today in the morning. The British Airways owner IAG has been one of the top losers and their share price plunged by more than 10%. Rolls-Royce today has been down by 9.4%. The shares of EasyJet on the FTSE 250 index were down by 9%, along with Whizz Air. Travel firms like cruise operators Carnival and Tui have also faced sharp falls.

Commenting on the market down, Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown told BBC News, "Fear has gripped the financial markets with the travel industry flying into another violent storm. With Europe still battling with the surge of a fourth wave of the virus, there are now fears that the highly mutated Covid strain discovered in states in Southern Africa will prompt fresh shut-downs around the world in an attempt to stop its spread, leading to another drag on recovery."

WHO organized a special meeting on the new Covid variant

WHO organized a special meeting on the new Covid variant

The World Health Organisation (WHO), on November 26, convened a special meeting to discuss the new Covid variant, and cautioned the countries against "hastily imposing travel restrictions linked to the new B.1.1.529 variant of Covid-19." The organization asked the countries to take a 'risk-based and scientific approach'. Spokesperson Christian Lindmeier told a UN briefing in Geneva, "At this point, implementing travel measures is being cautioned against. The WHO recommends that countries continue to apply a risk-based and scientific approach when implementing travel measures."

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(Alo read: Gold Rates Are Gaining Globally, As US PCE Inflation Rises: New Covid Variant Concerns)

Read more about: travel stocks covid pandemic tourism
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