Europe midday: Stocks mired in the red as markets assess latest news on Omicron
European shares were holding lower come midday after the head of drug company Moderna said existing Covid vaccines may struggle to combat the Omicron variant of the SARS-CoV-2 virus.
"Friday’s price action was likely a signal for at least a week of this kind of volatility, as markets scramble to price in the outlook using any data and news available. The dust will not settle for a while yet, and meanwhile the inflation drumbeat continues to sound, providing another reason to worry for beleaguered investors," was IG chief market analyst, Chris Beauchamp´s take on matters.
"With central banks having done their utmost in the previous part of this crisis, there is fear that they will be less able to act this time, and indeed may still continue on a tightening path."
The pan-European Stoxx 600 index was down 1.35% to 460.95 with all major regional bourses on the same path.
Moderna chief executive Stephane Bancel also told the Financial Times that it could take months for pharmaceutical companies to make enough jabs at a sufficient scale to make a difference to the new variant.
Bancel told the Financial Times the high number of Omicron mutations on the spike protein, which the virus uses to infect human cells, and the rapid spread of the variant in South Africa, suggested the current crop of vaccines may need to be modified next year.
"There is no world, I think, where [the effectiveness] is the same level [...] we had with Delta," Bancel said.
"I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to [...] are like 'this is not going to be good'."
Some market commentary highlighted how his remarks appeared to place Bancel at odds with rivals who had said that a new vaccine could be crafted quickly and be rolled-out in about three months.
Brent crude fell 2.8% to $71.40 per barrel, an 11-week low 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 10% on a report that it was considering a potential sale.
Future lifted its 2022 expectations, sending shares in the media group surging.