European stocks drop as Omicron worries intensify

Travel stocks fell 1 per cent, but were above their intra-day lows touched earlier in session

European stocks ended lower on Monday in their worst session for three weeks amid a wider equities sell-off, with investors fretting over the spectre of tighter pandemic curbs hitting the global economy as cases of the Omicron coronavirus strain surge.

The pan-European Stoxx 600 dropped -1.4 per cent to its lowest in two weeks. Oil companies, miners and auto stocks led declines, with all major sub-indexes ending lower.

Travel stocks fell 1 per cent, but were well above their intra-day lows touched earlier in the session, as some traders believed that positive vaccine-related headlines helped limit further losses.

Moderna said that a booster dose of its Covid-19 vaccine appeared to be protective against the fast-spreading Omicron variant in laboratory testing. "Headlines about booster shots working against the Omicron variant are providing little support, but if we are heading towards more movement restrictions and as long as virus cases continue to rise, we will see stock markets remain under pressure for a while," said Equiti Capital analyst David Madden.

Dublin

Souring sentiment linked to the current Covid surge hit Dublin stocks with several heavyweights losing value.

Chief among them was Ryanair which fell 2.5 per cent to €14.10. Travel-related stocks have been on the backfoot since the spread of the Omicron variant of Covid-19 and the reintroduction of restrictions in several countries.

The State's largest hotel chain Dalata fell 1.7 per cent to €3.34 amid a spate of cancellations across the hospitality industry here. Bank of Ireland fell 2.3 per cent while AIB traded broadly flat at €2.15. Building materials giant CRH also traded down 2.3 per cent at €43.73.

London

UK shares tracked a slide in global equity markets on Monday as concerns around a surge in cases of the Omicron coronavirus variant in Europe and the United States dented investor sentiment. After falling to a two-week low in early trading, the blue-chip FTSE 100 index recouped some early declines to end 1 per cent lower.

Oil majors BP and Royal Dutch Shell fell nearly 3 per cent each after crude prices dropped 3 per cent, while industrial metal miners lost 1.9 per cent due to weakness in copper prices.

The mid-cap FTSE 250 index has underperformed the blue-chip FTSE 100 index so far this year, adding 9 per cent compared with the 10 per cent recovery in the benchmark index, as weaker travel and leisure stocks capped gains.

Britain's cabinet was to meet later in the day as pressure grows on prime minister Boris Johnson to slow the spread of the Omicron strain with a tightening of social restrictions before Christmas.

Europe

Among individual shares, argenx leaped 8.3 per cent to the top of the benchmark Stoxx 600 after the Belgian group reached a regulatory milestone for its receptor blocker.

The worst performer, however, was Novo Nordisk, which plunged 11.7 per cent after the Danish drugmaker said it would not be able to meet demand for its new obesity drug due to US supply issues. BNP Paribas rose 0.5 per cent after the French lender agreed to sell its US unit, Bank of the West, to Canada's BMO Financial Group for about $16.3 billion (€14.5 billion).

Sweden's BillerudKorsnas dropped 10.8 per cent after saying it would buy US-based coated paper producer Verso for about $825 million in cash as the pulp and paper manufacturer looks to expand into North America.

New York

US stock indexes fell more than 1 per cent on Monday, dragged down by concerns about the impact of tighter Covid-19 curbs on the global economy, and a potentially devastating setback to president Joe Biden’s investment bill.

Surging global infections of the Omicron coronavirus variant have sparked worries in financial markets as many European nations and Britain weigh the possibility of restrictions during Christmas.

All of the 11 major S&P 500 sector indexes fell, with energy tumbling 2.4 per cent as oil prices slumped by about $3. Technology, communication services and consumer discretionary, the sectors which house the majority of mega-cap growth stocks, extended their slide from the previous session.

Oracle Corp fell 4.1 per cent after the enterprise software maker said it would buy electronic medical records company Cerner Corp for $28.3 billion. Shares of Cerner added 1 per cent.

Declining issues outnumbered advancers for a 5.89-to-1 ratio on the NYSE and for a 3.66-to-1 ratio on the Nasdaq. The S&P index recorded two new 52-week highs and 11 new lows, while the Nasdaq recorded 10 new highs and 280 new lows. – Additional reporting: Reuters