Omicron vaccine gloom weighs on markets

Comments from Moderna’s chief about vaccine efficacy against variant spook investors

A health worker administers a dose of the Covid-19 vaccine in Cape Town. Photograph: Dwayne Senior/Bloomberg

A health worker administers a dose of the Covid-19 vaccine in Cape Town. Photograph: Dwayne Senior/Bloomberg

 

Global stock markets slumped after comments from vaccine maker Moderna’s chief executive that existing Covid-19 vaccines were unlikely to be as effective against the Omicron variant as they have been against the Delta version.

Stocks were also knocked after US Federal Reserve chairman Jerome Powell warned that US inflation may not be transitory. In the US, Wall Street’s main indexes tumbled more than 1 per cent.

DUBLIN

The Iseq index fell more than 0.5 per cent on the Omicron news. Travel companies Irish Continental Group, which owns Irish Ferries, and Ryanair both suffered. ICG was down 3.4 per cent to €4.25, while the airline fell more than 0.4 per cent to €14.23.

Dalata, the State’s biggest hotel group, slid 1.7 per cent to €3.40.

Banks had a mixed performance due to the general virus gloom, but also following commentary from brokers that momentum on mortgage approvals should continue into 2022. AIB fell more than 1.8 per cent to €1.93, but Bank of Ireland was up 0.8 per cent to €4.81.

LONDON

The Ftse 100 fell 0.7 per cent after dropping as much as 1.7 per cent through the day. It shed more than 2 per cent in November as a whole. Most sectors in the Ftse 100 retreated. But mining stocks staged a late recovery, helping the index pare some losses as they tracked a jump in iron ore prices.

Drug maker AstraZeneca, which makes Covid-19 vaccines, fell 1.1 per cent after the comments from Moderna.

British airline EasyJet slid 1.2 per cent after reporting some softening of trading in its first quarter on Covid-19 outbreaks and the discovery of the Omicron variant. Winter bookings have started to weaken, the company said after announcing a £1 billion loss for the year.

Broader travel and leisure stocks also sank. Pub company Marstons was deeper in the red, down by 6.5 per cent, despite trying to reassure shareholders that it has not yet been hit by the new variant and is positive about Christmas.

Money transfer company Wise jumped 7.7 per cent, after it lifted its full-year revenue growth forecast after seeing it jump by a third in the first half.

EUROPE

The travel and leisure sector led losses in Europe, down 2.8 per cent, taking monthly losses to 20.6 per cent – the worst month since March 2020. In Germany the Dax index dropped 0.9 per cent, while Paris’s Cac 40 lost 0.6 per cent.

Among stocks, video games maker CD Projekt plunged 4.6 per cent after its profit fell significantly short of expectations in the third quarter.

Spanish fashion retailer Inditex, which owns Zara, fell 6.1 per cent after saying that Marta Ortega, daughter of its founder, would replace Pablo Isla, who successfully led the company for a decade.

NEW YORK

Moderna’s shares tumbled 7.6 per cent after its comments on vaccine effectiveness, while Regeneron Pharmaceuticals fell 2 per cent after it said its Covid-19 antibody treatment and other similar drugs could be less effective against Omicron.

The declines in the market were broad-based, with all the 11 major S&P sectors down. Communication services dropped 2 per cent, followed by energy and financials shares. Banks fell 1.6 per cent.

Travel and leisure stocks slumped, with S&P 1500 Airlines and the S&P 1500 hotels, restaurant and leisure indexes sliding 2.7 per cent and 2.1 per cent respectively, over concerns of more border restrictions to curb the spread of the new variant.

The S&P 500 and the Dow were also set for a monthly drop, underperforming the Nasdaq, which is tracking a small gain for November.

The uncertainty has triggered fresh alarm at a time when supply chain logjams are weighing on economic recovery and central banks globally are contemplating a return to pre-pandemic monetary policy to tackle a surge in inflation. Data showed US consumer confidence slipped in November.