FTSE 100 eyes worst month in more than 1 year on Omicron hit

Signage is seen outside the entrance of the London Stock Exchange in London August 23, 2018. — Reuters pic
Signage is seen outside the entrance of the London Stock Exchange in London August 23, 2018. — Reuters pic

Follow us on Instagram and subscribe to our Telegram channel for the latest updates.

LONDON, Nov 30 — UK’s blue-chip index was set for its worst monthly decline in over a year today, as a warning by Moderna’s chief executive over the Omicron coronavirus variant hammered pandemic-exposed sectors like banks and commodities.

The FTSE 100 declined 1.2 per cent, on track to end November with losses of more than 3 per cent, while the domestically focussed mid-cap index fell 1.1 per cent.

Moderna’s head Stéphane Bancel told the Financial Times that existing Covid-19 vaccines were unlikely to be as effective against the Omicron variant as they have been against the Delta version, sparking a sell-off in global stocks.

Drugmaker AstraZeneca, which also makes Covid-19 vaccines, fell 1.6 per cent.

British airline easyJet slid 2.1 per cent after reporting some softening of trading in the first quarter on Covid-19 outbreaks and the discovery of the Omicron variant. Broader travel and leisure stocks declined 2.3 per cent.

“It almost feels like minus 10 per cent for travel stocks is the new black,” said Max Kettner, multi-asset strategist at HSBC.

“Sentiment around reopening stocks has hit absolutely rock bottom now and it’s not just been a function of last Friday, but it has been a function of two or three months already.”

Rate-sensitive banks fell 1.1 per cent, while oil stocks dropped 2.7 per cent as crude prices declined on fears that the heavily mutated Omicron variant would spark fresh lockdowns and dent global growth.

Meanwhile, data showed costs were rising at the fastest rate in over 20 years for firms in Britain’s services sector, putting the Bank of England in a tough spot as they face rising inflation and economic risks at the same time.

The internationally focussed FTSE 100 has underperformed its domestic counterpart so far this year, gaining 8.3 per cent compared with the 9.6 per cent jump in the FTSE 250 index.

“You really want to short FTSE 250 and actually go back to the FTSE 100, the more export oriented international market,” added Kettner, pointing to cracks building in the UK economy.

Money transfer company Wise Plc jumped 9.9 per cent after it reported a 33 per cent rise in half-year revenue, while British media company Future Plc soared 15.7 per cent on lifting its 2022 outlook. — Reuters

You May Also Like

Related Articles