Finance

AEX crashes hard due to fear of new corona variant

The variant of the coronavirus, officially called B.1.1.529, emerging now is said to be unusually different from previous variants. “It is a mutation of serious concern,” said South African Health Minister Joe Phaahla.

These concerns are also immediately apparent on the stock exchanges. “We have many questions: does this virus spread faster, do vaccinations help?” says RTL Z fair commentator Durk Veenstra.

Insecurity

Uncertainty is usually bad for the stock market, even now. “The hope was that in a large part of the world corona will be behind us. And things are going a lot better, but with the arrival of the new variant, that picture may have to be revised,” says Jan Lambregts, head of research financial markets at Rabobank.

Investors are selling stocks they believe will suffer the most from new restrictions and lockdowns, and buying investments that they believe will be more resilient. Or maybe even take advantage of it. But most companies in the leading Amsterdam AEX index are lower. The AEX loses about 2.5 percent.

PostNL and Just Eat Takeaway benefit

Just Eat Takeaway is just such a company whose price is rising. If restaurants have to close earlier, consumers will probably have more home delivery, investors think.

And if non-essential stores have to close earlier, they expect more orders to be placed online. PostNL will be able to benefit from this. The share price of PostNL therefore rises by almost 5 percent.

KLM

But most other companies are going down. For example, the price of Air France-KLM is more than 8 percent lower. This is because air traffic to and from southern Africa will be stopped immediately. If the variant spreads further, there may be fewer flights to other destinations as well, investors fear.

Air traffic had just picked up again after the previous lockdown. New restrictions are therefore very inconvenient for aviation.

Shopping centres

There were already fears about the effect of new lockdowns for shops, and the discovery of the new corona variant further fuels this. Unibail Rodamco Westfield, which owns many shopping centers, such as the brand-new Mall of the Netherlands near The Hague, is even 10 percent down.

ABN Amro and ING

Banks and insurers are also falling hard. Investors buy bonds, among other things, because they think they are safer than stocks. Higher demand for bonds is pushing interest rates and lower interest rates are unfavorable for banks and insurers.

Aegon loses more than 7 percent, ABN Amro, ING Bank and NN about 5 percent and ASR just under 4 percent.

Shell and the oil price

Another loser is Shell, which falls 5 percent. This is due to the lower oil price. Several countries have sold part of their strategic oil reserves to push the oil price down. Furthermore, the new variant may depress economic growth, leading to lower demand for oil.

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