By Steve Goldstein
European stocks skidded on Tuesday on nervousness around the new omicron variant of coronavirus.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -1.01% fell 1.4% to 460.73, after the chief executive of vaccine maker Moderna /zigman2/quotes/205619834/composite MRNA -2.59% was quoted as saying existing vaccines would be much less effective against the new variant. Stephane Bancel told the Financial Times that it would be months before new vaccines against the variant would be available at scale.
The news hit every sector, with oil and gas /zigman2/quotes/210599627/delayed XX:SXEP +0.93% and the travel and leisure /zigman2/quotes/210599599/delayed XX:SXTP -0.19% sectors seeing the greatest pain.
Of the major regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.93% skidded 1.5%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.81% slumped 1.5% and the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.28% slumped 1.4%.
Futures on the Dow Jones Industrial Average /zigman2/quotes/210407078/delayed YM00 +0.17% lost more than 500 points.
“The prospect of new restrictions before Christmas puts a lot of pressure on energy and travel & leisure stocks, who are among today’s worst performers,” said Pierre Veyret, technical analyst at ActivTrades.
Markets will be focusing on Fed Chair Jerome Powell’s comments before a hearing on Tuesday. “This new variant is putting central banks in a difficult situation as they will now be torn between taking hawkish measures to tackle rising inflation, and keeping the extremely dovish policies in place in order to sustain growth with the economic recovery now threatened by this strain,” said Veyret.
Inditex /zigman2/quotes/203681809/delayed ES:ITX -0.39% shares slumped 5% after the resignation of its executive chairman, Pablo Isla Alvazez. He’ll be replaced by Marta Ortega Perez, the daughter of the company’s founder, as Oscar Garcia Maceiras, its general counsel, taking over as chief executive from Carlos Crespo Gonzalez.