European stocks set to fall sharply at open amid omicron vaccine fears

Key Points

• European stocks are expected to open lower on Tuesday, with futures reversing themselves following initial optimism about the omicron Covid variant.
• The U.K.’s FTSE index is seen opening 83 points lower at 7,019, Germany’s DAX 238 points lower at 14,997, France’s CAC 40 114 points lower at 6,662, according to data from IG.

LONDON — European stocks are expected to open sharply lower on Tuesday, with futures reversing themselves on new fears around the omicron Covid variant and vaccines.

The U.K.’s FTSE index is seen opening 83 points lower at 6,957, Germany’s DAX 251 points lower at 15,029, France’s CAC 40 114 points lower at 6,662 and Italy’s FTSE MIB down 492 points at 25,540, according to data from IG.

The reversal came after Moderna CEO Stephane Bancel told the Financial Times that he expects existing vaccines to be less effective against the new variant. Bancel told CNBC on Monday that it could take months to develop and ship an omicron-specific vaccine.

On Monday, Bancel told CNBC that it will take months to develop and ship a vaccine that specifically targets the omicron variant of the virus that causes Covid-19.

He expressed some uncertainty about omicron, saying that will take at least two weeks to determine how much the mutations have impacted the efficacy of the vaccines currently on the market.watch nowVIDEO04:45Moderna CEO Stephane Bancel: Could take weeks for more clarity on omicron Covid variant

“Depending on how much it dropped, we might decide on the one hand to give a higher dose of the current vaccine around the world to protect people, maybe people at very high risk, the immunocompromised, and the elderly should need a fourth dose” he said.

Monday’s rebound

European and U.S. stocks had rebounded on Monday rose following last Friday’s sell-off as concerns over the newly discovered omicron Covid variant appeared to ease.

In the U.S. stocks got a big boost after U.S. President Joe Biden said economic lockdowns in response to the omicron variant are currently off the table and there will be no new travel restrictions.

Covid symptoms linked to the omicron variant have been described as “extremely mild” by the South African doctor who first spotted the new strain. Nonetheless, the World Health Organization warned Monday that the omicron variant is likely to spread further and poses a “very high” global risk.

Source : CNBC