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European stocks fall as Omicron worries rattle investors

EconomyDec 02, 2021 12:29PM ET
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© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, December 1, 2021. REUTERS/Staff

By Anisha Sircar and Susan Mathew

(Reuters) -European shares fell more than 1% on Thursday, as countries ramped up restrictions to curb the spread of the Omicron coronavirus variant, raising worries about hits to a nascent economic recovery.

The continent-wide STOXX 600 closed down 1.2%, giving back more than half of the previous day's gains when a recovery in the pandemic-exposed sectors triggered the STOXX 600's best session in almost six months.

Germany agreed on new COVID-19 restrictions on Thursday that focussed on the unvaccinated, and the United States tightened travel restrictions, while U.S. Treasury Secretary Janet Yellen said the Omicron variant showed the pandemic could be around for "some time."

Travel and leisure shares, which suffer the most from movement curbs, fell 2.6%, bringing losses this year to 7%, significantly underperforming other major sectors which are on course to gain in double digits.

Europe's equity benchmark has seen sharp fluctuations in recent days on uncertainties about how contagious and severe the new variant is, and the effectiveness of current vaccines in tackling it.

"We're going to stay in this pattern of up one day and down the next as long as the Omicron story remains an unknown," said David Madden, market analyst at Equiti Capital.

"We won't be re-testing Europe's November highs until we're certain about the variant's knock-on effects, and until we know for sure whether we're going down the road of lockdowns."

The STOXX 600 is now about 5% away from record highs hit mid-November.

Tech stocks were the biggest decliners in Europe, with semiconductor companies Infineon (OTC:IFNNY) Technologies, AMS and ASML down between 4.4% and 5.7% on a report that Apple Inc (NASDAQ:AAPL) warned of slowing demand for its iPhone 13.

Luxury goods firms Hermes and Richemont fell 3.1% and 2.1%, respectively, despite their inclusion in the blue-chip Euro STOXX 50 index.

"We expect buybacks (in Europe) to catch up in 2022, rising 30%. Consumer, luxury and mining stocks should be prominent buyers of their own shares," Citigroup (NYSE:C) analysts said in a note.

Vifor Pharma surged 21.0% to the top of Swiss mid-cap index after media reports that Australian biotech firm CSL (OTC:CSLLY) is in talks to buy the drugmaker.

Also capping losses were oil majors BP (NYSE:BP), Royal Dutch Shell (LON:RDSa) and TotalEnergies rising between 0.6% and 1.8% as crude futures rise. London's energy-heavy FTSE 100 lost the least among regional peers, closing down 0.6%. [O/R]

European stocks fall as Omicron worries rattle investors
 

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Comments (2)
Modern Matrix
Modern Matrix Dec 02, 2021 6:46AM ET
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Nothing has changed aside from the fact they shorted and use the news as a tool to panick the populous... the wealthy are almost done robbing the little guy of their money. The most pathetic part is how badly us Americans love people with money. we don't seem to care how people got wealthy, just admire them regardless of how many people they robbed to get to where they are. They are making the world a much nastier place.
Thijs Quispel
Thijs Quispel Dec 02, 2021 6:23AM ET
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why? this is just a follow-up from the US market. Nothing to do with covid. The vaccine is just as useful as always. Literally, nothing has changed.
 
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