European Stocks Weaken as Omicron Concerns Mount

This post was originally published on this site – European stock markets traded lower Thursday as investors fretted about the spread of the omicron Covid variant and the associated economic damage.

At 3:50 AM ET (0850 GMT), the DAX in Germany traded 1% lower, the CAC 40 in France fell 0.9% and the U.K.’s FTSE 100 dropped 0.7%. 

European indices followed their U.S. counterparts lower following the news that the United States became on Wednesday the latest country to identify a case of the omicron Covid-19 variant within its borders. 

The World Health Organisation stated that at least 23 countries from five of six regions have reported cases of omicron, “and we expect that number to grow.” 

The UN agency expects to have more information on the transmissibility of the new variant of the coronavirus within days, but noted that hospitalizations were rising across South Africa, where the new variant was first discovered, and omicron is rapidly becoming the dominant variant there.

“Frankly, omicron will dominate and overwhelm the whole world in three to six months,” said Singapore doctor Leong Hoe Nam on CNBC.

There was some good news from GlaxoSmithKline (NYSE:GSK) Thursday, with the drugmaker’s antiviral Covid treatment approved for use by the U.K. regulatory agency while analysis showed it was effective against omicron. Its stock rose 0.2%, outperforming the negative overall market.

Novartis (SIX:NOVN) stock also climbed 0.2% after the Swiss drugmaker expressed confidence in its ability to grow sales by 4% each year until 2026, while Thyssenkrupp (DE:TKAG) stock rose 0.3% after the German conglomerate said it was on track with its restructuring plans and it expects its margins to increase.

Elsewhere, Daily Mail and General Trust (LON:DMGOa) stock rose 1.9% after the controlling shareholders of the Daily Mail publisher, the Rothermere family, increased the cash component of its offer to buy out other shareholders.

Economic data releases later Thursday include the Eurozone unemployment rate and producer prices for October.

Crude prices traded higher Thursday, recovering from the three-months lows hit during the previous session, as traders adjusted their positions ahead of the OPEC+ meeting to decide future output levels. 

Expectations are growing that the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, will pause plans to add 400,000 barrels per day of supply in January.

Capping the gains was news from the Energy Information Administration of a smaller than expected draw from U.S. crude inventories of 910,000 barrels last week.

By 3:50 AM ET, U.S. crude futures traded 1.4% higher at $66.50 a barrel, while the Brent contract rose 1.3% to $69.73.

Additionally, gold futures fell 0.7% to $1,771.30/oz, while EUR/USD traded largely flat at 1.1317.