GLOBAL MARKETS-Asian stocks slip as new COVID-19 strain darkens recovery prospects

By Kane Wu and John McCrank
HONG KONG/NEW YORK, Dec 22 (Reuters) - Asian shares slipped
on Tuesday, extending a pullback from multi-year highs hit last
week on renewed fears a highly infectious new strain of COVID-19
that shut down much of Britain could lead to a slower global
economic recovery.
Australian S&P/ASX 200 .AXJO widened losses to be down
0.67%. Japan's Nikkei 225 .N225 slipped 0.85%.
MSCI's gauge of Asia Pacific stocks outside Japan
.MIAPJ0000PUS fell 0.21%. China's benchmark CSI300 Index
.CSI300 and Hang Seng Index .HSI both opened down 0.2%.
"An escalation of European COVID-19 restrictions in response
to fears around a new variant, which is supposed to be faster
spreading, should, and did, of course, elicit a negative
reaction from prices via the near-term global growth impact,"
said Stephen Innes, Chief Global Market Strategist at Axi.
"Illiquid conditions will persist through year-end, but dips
like this could present more of an opportunity to fade than
anything else," he said.
Countries across the globe shut their borders to Britain on
Monday due to fears about a new strain of coronavirus, said to
be up to 70% more transmissible than the original, causing
travel chaos and raising the prospect of food shortages days
before Britain is set to leave the European Union. The discovery of the new strain, just months before vaccines
are expected to be widely available, renewed fears about the
virus, which killed about 1.7 million people worldwide. As a
result European shares fell on Monday in their worst session in
almost two months. Oil prices dropped on expectations of lower demand, with
U.S. crude CLc1 recently down 0.33% at $47.81 per barrel,
while Brent LCOc1 was 0.2% lower at $50.81.
U.S. stocks pared much of their early losses during a
volatile session on Monday on hopes a long-anticipated stimulus
package agreed to by congressional leaders will help spur a
stronger recovery.
The S&P 500 .SPX ended the day down 0.39% at 3,694.92.
Volatility in U.S. equities jumped in thin holiday trading.
The Cboe Volatility Index .VIX , known as Wall Street's "fear
gauge," notched its largest one-day gain since late October,
even though it finished well off its session high.
Spot gold XAU= rose 0.3% to $1,881.7 per ounce, with the
safe-haven asset hitting a one-month high earlier in the
session.