European and Asian stock markets fell on Tuesday, while investors deposited money in premium government bonds, as traders’ attention was dominated by concerns about a coronavirus variant. Omicron.
The Stoxx 600 Regional Stock Index, rose on Monday alongside Wall Street stocks to reflect exploding optimism that the market volatility caused by Omicron will turn into a buying opportunity, opening up 1.1% lower. Britain’s FTSE 100, Germany’s Dax and France’s Cac 40 are all down about 1% in morning trade.
Hong Kong’s Hang Seng index fell 1.5% and Tokyo’s Nikkei 225 lost 1.6%, while futures contracts tracking Wall Street’s S&P 500 index fell nearly 1% in early European trade. Europe.
Brent crude, the international oil benchmark, fell 3% to $71.27 a barrel, hitting its lowest level since early September.
The moves come after Stéphane Bancel, chief executive officer of vaccine maker Moderna, told the Financial Times that existing vaccines would be much less effective against Omicron than earlier strains of coronavirus. He also warned that it would take many months for pharmaceutical companies to produce new variant stimulant injections on a large scale.
Earlier in the session, Hong Kong banned non-resident visitors from 13 countries in response to Omicron and Japan confirmed the first case of this variant, which was first detected in southern Africa. and is now available in the UK, most of Europe and Canada.
Investors expect the market to remain volatile as more information becomes available about Omicron and the capacity of governments and existing vaccine programs to prevent it.
The US has not detected any cases of this variant so far, although President Joe Biden has predicted it will appear there while also ruling out more lockdowns to prevent the spread of the virus. it.
“The U.S. has always been a big catalyst for market moves, so the level of market reaction can be significant,” said Tancredi Cordero, founder and chief executive officer of investment consulting firm Kuros Associates. could still increase if we start to see cases of this variant in the US.
“Markets also come to this from complacency,” he added, noting that the S&P 500 and Stoxx hit record highs earlier this month despite the U.S. Federal Reserve’s push announced the start of a $120 billion-a-month monetary stimulus cut and global inflation high.
The yield on the 10-year Treasury note fell 0.07 percentage points to 1.46 percent as the price of the debt rose. The bond market has faced a flurry of volatility in recent days as traders assess the potential impact of the new variant on economic growth and central bank policies.