European stocks wobble on Omicron vaccine-escape worries
11:30, 2 December 2021
UK stocks inched lower on Thursday, as concerns about the effectiveness of vaccination programmes against new strains of coronavirus intensified and heightened pressures on booster vaccines being rolled out sooner.
European stocks followed London’s FTSE 100’s 0.7% fall, with the Euro Stoxx 50 Index dropping 1.4%, following pharmaceutical giant Moderna’s warning that vaccine effectiveness may be decreasing and it may take several months for jabs to be modified to deal with the number of mutations Omicron presents.
Overnight in Asia, Hong Kong’s Hang Seng Index gained, but the US S&P 500 Index struggled.
What’s interesting today: AJ Bell announced a dividend increase and an unexpected shareholder payout as annual profits were hiked by 13%. Royal Dutch Shell also announced a share buyback programme worth $1.5bn, as it sold its US Permian business.
Why are stocks down today?
First Omicron case detected in fully vaccinated traveller: The first Omicron case was recently detected in a fully vaccinated US traveller who had been to South Africa.
What this means: Although the US government and markets knew that the new variant would likely arrive sooner or later, the shock of the strain being discovered in a fully vaccinated individual still rattled investors because it may be proof of decreasing vaccine effectiveness. Traders were also disturbed by speculation that the world may soon have to switch to a three-jab programme to deal with the numerous complex mutations this strain presents along with fears that Omicron may overwhelm the world in a few months.
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Stock markets: key highlights
- The FTSE 100 Index edged lower 0.85% on Thursday, to 7,107.4 points
- The Euro Stoxx 50 Index also inched down 1.45% to touch 4,118.5 points
- Germany’s DAX Index dropped 1.28% to 15,274.8 points
- France’s CAC 40 Index also fell 1.14% to 6,803.3 points
- The leading sectors were communications and process industries, whereas transportation and retail lagged behind
- US S&P 500 futures climbed up 0.43% to $4,527.8
- The CBOE Volatility Index, or VIX, a measure of expected fluctuations in US stocks jumped up to 31.12, reflecting a sharp rise in market anxieties
- The US Dollar Index climbed up to $96.14
- The US 10-year Bond Yield Index inched down to 1.456%
Top stock gainers: UK and Europe
- The best-performing companies in the UK were BT Group, Mondi and Taylor Wimpey
- BT Group recently appointed a new chairman, Adam Crozier
- Mondi recently announced a €20m investment in an Austrian mill which will greatly help increase sustainability
- Taylor Wimpey shares rose on the back of increasing housing prices
- The top stock gainers in Europe were Prosus, ASML NV, and Inditex
- Prosus shares rallied with increased first-half profits due to Tencent
- ASML NV has recently overtaken Intel Corp, the world’s largest producer of PC processors
- Inditex recently appointed Marta Ortega, the daughter of Zara’s founder as chairwoman
Top stock losers: UK and Europe
- Among the worst performing companies in the UK were Royal Mail, and Ocado Group
- Royal Mail has recently been criticized by Oxford clients for their long parcel delivery times
- The top stock losers in Europe were BASF, Bayer and Daimler
- Engie recently signed a 25-year deal with BASF regarding European renewable electricity
- Bayer recently pledged EUR 100m for sustainable health products in order to meet the company’s sustainability goals
- Daimler India recently started smart inter-city buses in partnership with IntrCity