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Europe midday: Travel stocks fall out of favour after TUI Omicron warning

By Frank Prenesti

Date: Wednesday 08 Dec 2021

Europe midday: Travel stocks fall out of favour after TUI Omicron warning

(Sharecast News) - European stocks slipped into the red on Wednesday as airline stocks tumbled on a bookings warning from travel giant TUI over the Omicron coronavirus variant.


The pan-European Stoxx 600 index gave up early gains to be 0.12% lower at midday, with regional bourses following suit except for Britain's FTSE 100.

Germany's BioNTech, which makes Covid-19 vaccines with Pfizer, fell after a study showed that the Omicron variant can partially evade protection from two doses of their treatment.

Pfizer CEO Albert Bourla on Tuesday said the Omicron variant appeared to be milder than previous strains, but also seemed to spread faster and could lead to more mutations in the future.

However, South African scientists warned the variant cut significantly the antibody protection generated by the Pfizer and BioNTech vaccine, according to a small preliminary study. However, it added that people who had recovered from the virus and received a booster shot would have more protection from severe disease.

"The headlong rally in global markets has stalled, but the overall outlook for equities remains firmly positive. The previous three sessions put markets firmly back on the front foot, with Omicron concerns almost entirely evaporating," said IG analyst Chris Beauchamp.

"Asian markets continued to make headway, and despite some worrying data on vaccine efficacy against the new variant the overall impression is that markets have now done their best to price in the variant and any potential new restrictions."

In equity news, TUI shares fell 4.78% as the world's biggest travel company said Omicron had forced a slowdown in winter bookings. The news had a knock-on effect on sector peers, with airlines IAG, Wizz Air, Ryanair and easyJet all lower as travellers fretted about increased costs for hotel quarantines.

Miniature wargames manufacturer Games Workshop slumped as the company said pre-tax profits had slipped in the six months to November 28, despite seeing sales moderately improve.

Berkeley shares rose almost 5% as the UK housebuilder increased its guidance for the current year and beyond after reporting a 26% increase in first-half profit fuelled by its investment in London and surrounding areas.

German meal-kit company HelloFresh slid after an underwhelming outlook for 2022 earnings.

Chipmakers Infineon Technologies and STMicroelectronics both fell after a Morgan Stanley downgrade to 'equal-weight'.

Man Group gained after the firm said it would buy back up to $250m of shares to return cash to shareholders.

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