Stocks and oil prices fall as Moderna CEO says vaccine will hit Omicron

Stocks in Asia Pacific and Europe slid, the Dow fell 1% and oil prices fell about 2% as more countries reported cases of the variant and imposed new travel restrictions. The mood was also eased by a warning from Moderna CEO Stéphane Bancel that the current vaccine will fight with Omicron.

“There is no world, I think, where [the effectiveness] is the same level. . . we had with [the] Delta [variant]”, Bancel said in an interview with the Financial Times published on Tuesday. I think it will be a material drop. I just don’t know how much because we need to wait for data. But all the scientists I talked to… said, ‘This isn’t going to be good’. “

South Korea Kospi (KOSPI) led the loss in the region, down 2.4%, while that of Japan Nikkei 225 (N225) down 1.6%. From Hong Kong Hang Seng Index (HSI) down 1.6%. NS Shanghai Composite (SHCOMP) flat. China’s economy got some good news on Tuesday as the country’s big factories showed signs of recovery. European indexes opened about 1% lower.

A lot is still unknown about the Omicron variant, but scientists are racing to determine its severity, transmissibility, and whether it evades current vaccines.

Moderna’s Bancel said in a statement last week that the mutations in the Omicron variant were “concerning”, adding that the company was “moving as quickly as possible to execute our strategy to address this variant.”

Jerome Powell says Omicron poses 3 major threats to US economy

The world has moved to a “change holding model, for greater clarity on [how] Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, wrote in a research note on Tuesday.

He pointed out that stocks fell in South Korea after the government there shelved plans to ease Covid-19 restrictions, “emphasizing again what is really driving the market right now. “

Meanwhile, Japan on Tuesday confirmed its first case of the Omicron variant.

US stocks recovered on Monday following the sell-off driven by Omicron last weekend. But they look poised to fall back into the red on Tuesday: Dow (INDU) futures contracts fell 1% last time, while S&P 500 (SPX) forward contracts fell 0.8%. Nasdaq (COMP) Futures fell 0.4%.

Halley added: “The fact that markets haven’t completely eliminated Friday’s woes suggests at least some caution remains.

Federal Reserve Chairman Jerome Powell, meanwhile, set up to testify third that the Omicron variant threatens the US economic recovery. If this variation prolongs the pandemic, it could cause prices to soar, hurt job growth and make the supply chain crisis worse.

Oil prices are also sliding, after collapsing on Friday on concerns that the variant will hit energy demand by eating into the amount of people driving and flying. Both Brent crude, the global benchmark, and West Texas Intermediate, the US benchmark, fell about 2% to trade below $72 and $69 a barrel, respectively.

– CNN’s Junko Ogura contributed to this report.


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