Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

European Stocks Lower; Emirates President Warns of Airlines "Trauma"

Published 11/30/2021, 03:49 AM
Updated 11/30/2021, 03:50 AM
© Reuters.

© Reuters.

By Peter Nurse 

Investing.com - European stock markets traded sharply lower Tuesday, weighed by fresh concerns about the effectiveness of the current vaccines in combating the newly discovered omicron Covid variant.

At 3:50 AM ET (0850 GMT), the DAX in Germany traded 1.4% lower, the CAC 40 in France also fell 1.6% and the U.K.’s FTSE 100 dropped 1.3%. 

Sentiment slumped Tuesday after Moderna (NASDAQ:MRNA) chief Stephane Bancel suggested in a Financial Times article that existing Covid-19 vaccines would struggle to cope with the omicron variant, predicting a ‘material drop’ in their effectiveness.

He also warned that it would take months before the drugmakers can manufacture the new variant-specific injections in sufficient quantities to be effective.

Moderna, along with Pfizer (NYSE:PFE) and AstraZeneca (NASDAQ:AZN), have supplied most of the developed world with the vaccines to combat the Covid-19 virus.

The omicron variant has now spread to more than a dozen countries, prompting the introduction of new travel curbs. 

A major hit to the peak December travel season would cause "significant traumas" in the global aviation business, Emirates airline President Tim Clark said on Tuesday.

Air France KLM (OTC:AFLYY) stock fell 2.5%, IAG (LON:ICAG) stock dropped 0.8%, Lufthansa (DE:LHAG) stock fell 0.7%, while easyJet (LON:EZJ) stock only fell 0.2% after the budget airline stated that it is expecting passenger numbers to return to pre-pandemic levels next summer despite uncertainty hitting the winter months.

Elsewhere, Inditex (MC:ITX) stock fell 4.9% after the owner of the Zara and Massimo Dutti chains announced a shake up at the top of its management, with Marta Ortega Perez, the daughter of founder Amancio Ortega, taking over as chief executive from April.

Ericsson (BS:ERICAs) stock fell 0.9%, matching the overall weakness, even after the Swedish telecom equipment maker raised its global forecast for 5G mobile subscriptions to 660 million by the end of this year, citing stronger-than-expected demand in China and North America.

Turning to economic data, French inflation rose unexpectedly in November to hit its highest level in 13 years, with consumer prices up 0.4% from last month, giving a 12-month inflation rate of 3.4%, the highest since September 2008.

This could put upward pressure on the flash November Eurozone CPI figure, due later in the session. This was already expected to climb to an annual 4.5% from October’s 4.1%, more than double the European Central Bank’s 2% target. German unemployment figures for November also fell to their lowest since March last year, extending a series of substantial declines with a steeper-than-expected drop of 34,000 in seasonally-adjusted terms.

Earlier Tuesday, China recorded a surprise growth in factory activity in November, the first in three months, with the country’s manufacturing purchasing managers index coming in at 50.1 in November, above the previous month’s 49.2 figure. The non-manufacturing PMI was at 52.3, higher than the previous month’s 52.4 figure.

Crude prices retreated as the omicron concerns returned, with traders fretting about fresh lockdowns and the associated hit to global demand. 

That said, with a further hit to demand likely, expectations are growing that the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, will put on hold the plans to add 400,000 barrels a day in January when it meets later in the week.

By 3:50 AM ET, U.S. crude futures traded 2.5% lower at $68.19 a barrel, having climbed 2.6% on Monday, while the Brent contract fell 2.4% to $71.45, after rising 1% during the previous session.

Additionally, gold futures rose 0.6% to $1,795.15/oz, while EUR/USD traded 0.5% higher at 1.1351.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.