Pandemic-favourite stocks jump after new variant is discovered
Alpha Pro Tech, a maker of personal protective equipment, jumped 22%
Shares in companies whose businesses got a boost during past Covid-19 flare-ups rose on Friday, as a new strain of the virus rattled markets and spurred fears of fresh social restrictions.
Zoom Video Communications and home-workout firm Peloton Interactive jumped 9% and 6%, respectively, while the broader S&P 500 index dipped 1.5%. Streaming company Netflix rose 2.2% and food delivery firm DoorDash added 2.2%.
Work-from-home stocks and food delivery companies were among the gainers in Europe, too, with TeamViewer rising 5.9% and Delivery Hero, Just Eat Takeaway.com and Deliveroo all advancing, even as the Stoxx Europe 600 benchmark fell as much as 3.7% before trimming the loss.
Covid-19 testing companies gained amid concern about the new strain, first discovered in Southern Africa. Diagnostics firm Teladoc Health added 9% in New York, while Eurofins Scientific advanced 8.4% in Paris. Alpha Pro Tech, a maker of personal protective equipment, jumped 22%. Vaccine makers were also stronger.
Friday’s broad market slump “is a logical reaction, people are worried and in the right places, like travel,” said Martin Moeller, co-head of Swiss & global portfolio management at Union Bancaire Privee in Geneva, while noting gains for stay-at-home stocks. “We will learn more over time if it is more contagious or more lethal.”
So-called lockdown winners and Covid-19 testing and treatment firms had already been gaining in recent weeks as European infection rates rose. They had underperformed over the northern hemisphere summer as vaccination programmes calmed concerns around the pandemic.
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