The Fear of Delta Dominating the Financial Market

Asian Markets Plunge Following New York and Europe
Government Bond Yields and Oil Prices Also Decline
Concerns Over Economic Obstacles Due to Variant Spread

[Asia Economy New York=Correspondent Baek Jong-min, Reporter Kim Eun-byeol] Fear of the COVID-19 Delta variant has expanded, pulling down global stock markets, government bond yields, and international oil prices simultaneously. Concerns are growing that the spread of the variant could hinder the economic recovery of major countries.

On the 19th (local time), the Dow Jones Industrial Average closed at 33,962.04, down 725.81 points (2.04%). The S&P 500 fell 68.67 points (1.59%) to 4,258.49, and the Nasdaq dropped 152.25 points (1.06%) to 14,274.98.

The Dow fell nearly 900 points, close to 3%, during the session, with economic reopening beneficiaries particularly hit. Airline and travel-related stocks plunged sharply, while Costco hit an all-time high amid expectations of benefiting from the variant's spread.

Influenced by the New York stock market, Asian markets also opened weaker. As of 10:27 a.m. on the 20th, the KOSPI was trading at 3,232.60, down 0.37% (11.89 points) from the previous day. In Tokyo, the Nikkei 225 opened at 7,359.00, down 1.06% (293.74 points) from the previous trading day. European markets also mostly experienced declines in the 2% range the day before.

Conversely, investment sentiment toward safe-haven assets expanded, causing U.S. Treasury yields to drop dramatically. The 10-year U.S. Treasury yield fell to as low as 1.17% during the session. The sharp decline from 1.3% over the previous weekend recalled the early days of the COVID-19 pandemic last year. A drop in Treasury yields means a rise in bond prices. German bond yields also fell to -0.393%, extending their strength.

On the day, the dollar index rose 0.02% to 92.847, marking its highest level since May. On the 20th, the KRW-USD exchange rate opened at 1,152.0 won, up 4.2 won from the previous day, hitting an intraday high.

South Korea's 10-year government bond yield fell 5.8 basis points (1 bp = 0.01 percentage points) to 1.914%, marking its lowest level in about five months. The 3-year government bond yield also declined 4.0 basis points to 1.419%.

Concerns over a slowdown in economic recovery, combined with increased supply, also pulled down the soaring oil prices. West Texas Intermediate (WTI) crude oil closed at $66.42 per barrel, down $5.39 (7.5%) on the day.

As market volatility increased, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as the "fear index," reached 22.50, its highest level since May.

This content was produced with the assistance of AI translation services.