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* S&P 500 futures down 1.8%; European stocks down 2.6%;
* U.S. crude oil falls 6.7%
* German bond yields down 7.5 bps
By Carolyn Cohn
LONDON, Nov 26 (Reuters) - U.S. stock index futures pointed
to a slide at the post-Thanksgiving Wall Street open and oil hit
two-month lows as fears of a possibly vaccine-resistant
coronavirus variant sent investors scurrying to safe-haven
assets.
Scientists say the variant, detected in South Africa,
Botswana, Israel and Hong Kong, has an unusual combination of
mutations, may be able to evade immune responses and could be
more transmissible.
Britain said it was the most significant variant to date and
was one of several countries to impose travel restrictions on
southern Africa.
The European Commission also said it wanted to consider
suspending travel from countries where the new variant has been
identified, though the World Health Organization (WHO) cautioned
against hastily imposing such restrictions.
"This could be the moment that people look back on as
derailing the economic recovery and rate rises but what we have
is a big insertion of uncertainty rather than something
material," said Peter Rutter, head of equities at Royal London
Asset Management.
"The very fact we don't know is what's concerning the
market."
The WHO is convening an experts' meeting on Friday to
evaluate whether the new variant is a "variant of concern".
It will take a few weeks to understand the impact of the
variant, a spokesperson said.
U.S. crude futures plunged 6.7% to $73.17 a barrel
and Brent crude was down 5.86% to $77.43 on the possible
hit to travel and demand for fuel.
S&P 500 futures fell 1.8% and Dow futures
slid 2.2%.
U.S. equity markets were shut on Thursday for Thanksgiving
and close early on Friday.
Global shares fell 0.7% and were on course
for their worst week since early October.
European stocks were 2.6% lower, on track for their
worst day since September 2020.
The pandemic playbooks were back out. Tourism-sensitive
stocks such as plane engine maker Rolls Royce, easyJet
and International Consolidated Airlines all saw
double digit losses in Europe.
Malaysian rubber glove maker Supermax, which
soared 1500% during the first wave of the pandemic, leapt 15%.
Germany's DAX lost 2.8% and Britain's FTSE 100
also fell 2.8%, to its lowest in more than a month.
MSCI's index of Asian shares outside Japan
dropped 2.2%, its sharpest fall since August. Japan's Nikkei
skidded 2.5%.
Giles Coghlan, chief currency analyst at brokerage HYCM,
said the closure of the U.S. market for Thanksgiving had
exacerbated moves.
"We need to see how transmissible this variant is, is it
able to evade the vaccines - this is crucial," Coghlan said.
"I expect this story to drag on for a few days until
scientists have a better understanding of it."
As investors dashed for safe-haven assets, the yen
jumped more than 1% to 113.9 per dollar, having languished
earlier this week at five-year lows.
The dollar fell 0.5% against an index of currencies
and the euro rose 0.64% to $1.1278.
The single currency, however, fell to near 6-1/2 year lows
against the Swiss franc at 1.044 francs per euro.
South Africa's rand fell more than 1% to a one-year
low and its 2030 bond yield soared 19 basis points
(bps). Bond yields move inversely to price.
Other bond markets strengthened, benefiting from their safe
haven status. Ten-year Treasury yields fell 12 bps
to 1.5226% and 30-year yields were down 9 bps to
1.8818%.
Germany's 10-year bond yield was down 7.5 bps at
-0.32%, set for its biggest daily fall since March.
Gold rose 1.3% to $1,810 an ounce.
The market swings come against a backdrop of already growing
concern about COVID-19 outbreaks driving restrictions on
movement and activity in Europe and beyond.
Markets had previously been upbeat about the strength of
economic recovery, despite growing inflation fears.
"Going into year-end, investors may prefer to keep a bit
more in safe havens and we also have to assess how it feeds into
central bank risk assessments, even if this variant turns out
not to be of huge concern," said Commerzbank rates strategist
Rainer Guntermann.
"It's a reminder that the pandemic could pop up again at
virtually any time."
(Additional reporting by Tom Westbrook in Sydney and Marc
Jones, Sujata Rao and Abhinav Ramnarayan in London; Editing by
Mark Potter, Kirsten Donovan)
