Europe close: Stocks drop amid Omicron uncertainty, Fed chief's remarks
By Alexander Bueso
Date: Tuesday 30 Nov 2021
(Sharecast News) - European shares were unable to hold onto the previous day's timid bounce after the head of drug company Moderna said existing Covid vaccines may struggle to combat the Omicron variant of the SARS-CoV-2 virus.
Further pressuring shares, the head of the US central bank unexpectedly stuck to the pre-Omicron script, leaving the door open to faster tapering of its bond purchases and telling the Senate Banking Committee that it was time to retire the word "transitory" when talking about inflation.
"Stocks throughout Europe and the US are staging a bounce-back today, with early declines being bought up into the European close," said IG senior market analyst Josh Mahony.
"While the Moderna CEO may have whipped up fears over weak vaccine protection against the Omicron variant, he offered little new data to justify the sharp European losses this morning. While data remains thin on the ground given the relative infancy of this strain, markets are likely to remain highly volatile and unpredictable as they react to any news that could guide our expectations over how this will play out."
The pan-European Stoxx 600 index retreated 0.92% to 462.96 on the last day of the month with all major regional bourses on the same path.
Germany's Dax gave back 1.18% to 15,100.13 while Spain's Inex 35 shed 1.78% to 8,305.1.
Overnight, Moderna chief executive, Stephane Bancel, told the Financial Times: "There is no world, I think, where [the effectiveness] is the same level [...] we had with Delta," Bancel said.
Later in the session however, BioNTech, Ugur Sahin, told Dow Jones Newswires that the new virus variant could see more people become infected but that even then immunce cells will probably still target Omicron.
"Don't freak out. The plan remains the same: Speed up the administration of a third booster shot," Sahin said.
Researchers at the University of Oxford appeared to be of a similar mind, saying there was no evidence as of yet that the current shots would not provide some protection against the new strain.
Brent crude oil futures fell 3.91% to $70.57 per barrel, after plunging more than 10% on Friday, when concerns about Omicron emerged from Southern Africa.
In equity news, shares in Swedish oil and gas company Lundin Energy fell 6% on a report that it was considering a potential sale.
Future lifted its 2022 expectations, sending shares in the media group surging.
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