Economic news

Europe Stocks Set to End Nov with 3% Loss on Omicron Fears

  • STOXX 600 hits seven-week lows
  • Travel & leisure index set for 20% plunge in Nov
  • Oil stocks dive on crude slump
  • CD Projekt, Volvo skid after quarterly updates

Nov 30 (Reuters) - European stocks fell on Tuesday and were set to end the month 3% lower after vaccine maker Moderna's head cast doubts over the efficacy of COVID-19 shots against the newly detected Omicron variant.

The pan-European STOXX 600 dropped 1.5% to hit its lowest levels in nearly seven weeks. Germany's DAX, France's CAC 40 and UK's FTSE 100 also slipped more than 1.5% each.

Global stocks tanked after Moderna Chief Executive Stéphane Bancel told the Financial Times that existing COVID-19 vaccines are unlikely to be as effective against the newly detected variant as they have been previously. 

"We're hearing two sides of the story that this is a highly contagious variant, so naturally you have classic risk-off moves in the market, but also that its effect on people that are vaccinated is much lower," said Daniela Sabin Hathorn, markets analyst at IG.

"That duality is being reflected in equities, where you see big risk-off moves, driven by headlines followed by corrections the next day."

Oil stocks tumbled 2.9%, tracking a drop in crude prices, while bank stocks sank 1.8% to their lowest in more than two months.

Travel & leisure stocks shed 2.7%, with British airline easyJet sliding after reporting softer demand in the first quarter following the emergence of the Omicron variant. 

The index is set to log its worst month since the height of the pandemic in March 2020, dropping more than 20% in November.

The pandemic-sensitive sectors slumped last week when the Omicron variant was first detected in South Africa, wiping out roughly $2 trillion off the value of global stocks on Friday.

"Investors are weighing what this all means for economic growth and monetary policy, but ultimately, unless we go into a total lockdown again, there is still positive momentum left for European equities heading into 2022," Hathorn said.

Video games maker CD Projekt plunged 7.7% to the bottom of Polish blue-chip index WIG20 after its profit fell significantly short of expectations in the third quarter. 

Sweden-based automaker Volvo Cars slipped 3% after posting a dip in quarterly operating profit and monthly sales volumes amid a global semiconductor shortage. 

Spanish fashion retailer Inditex fell 4.2% after saying that Marta Ortega, daughter of its founder, will replace Pablo Isla, who successfully led the company for a decade.

Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Editing by Uttaresh.V and Arun Koyyur

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree