EMERGING MARKETS-Asian FX, stocks drop as new coronavirus variant spooks markets
By Harish Sridharan
Nov 26 (Reuters) - Shares and currencies in Asia's emerging markets fell sharply on Friday, as investors fled riskier assets in favour of safe-haven ones after the detection of a new coronavirus variant that may be more resistant to existing vaccines.
Equities in Taipei .TWII dropped as much as 1.6%, on track for their worst session since early October, while shares in Seoul .KS11, Singapore .STI, Bangkok .SETI and Manila .PSI fell more than 1.3%.
Scientists have said the new COVID-19 variant, detected in South Africa, may be able to evade immune responses. British authorities think it is the most significant variant to date and worry it could make vaccines less effective and hurt efforts to fight the pandemic.
The latest development in South Africa ramped up selling pressure in regional markets, already reeling against broad dollar strength due to bets that an increasingly hawkish U.S. Federal Reserve will lift rates by the middle of next year.
Risk-off trades owing to (the) new South African variant scare was the dominant driver while (the) policy divergence thematic takes the back seat, said Christopher Wong, senior FX strategist at Maybank.
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