UK - Global markets slammed by Moderna's Omicron vaccine war...| MENAFN.COM

Wednesday, 28 September 2022 12:14 GMT

UK - Global markets slammed by Moderna's Omicron vaccine warning


(MENAFN- Jordan Times)

LONDON — World stocks slid on Tuesday after Moderna warned current vaccines might be less effective at fending off the Omicron variant and after eurozone inflation spiked to a record high.

Frankfurt, London and Paris followed Asia sharply lower before limiting losses to around half of 1 per cent, with sentiment dogged by fears of fresh economic fallout from the long-running COVID crisis.

Wall Street followed the lead as the Dow was off almost 1 per cent after the opening bell while the tech-heavy Nasdaq was down 0.4 per cent. 

Oil prices took a tumble following the Moderna remarks, which have reignited stubborn concerns over how the Omicron variant spread could hit energy demand.

Moreover, the markets selloff accelerated as data showed eurozone inflation rocketed on runaway energy prices to a record 4.9 per cent.

 

'Markets hate uncertainty' 

 

'It only took one comment from the boss of drugs firm Moderna to derail markets once again,' noted AJ Bell investment director Russ Mould.

'Markets hate uncertainty, and this is precisely what we have now. No-one knows how much trouble the new variant is going to cause.'

Moderna Chief Executive Stephane Bancel's comments, in an interview with The Financial Times, sent traders running for cover.

'There is no world, I think, where [the effectiveness] is the same level... we had with Delta,' Bancel told the newspaper.

The high amount of mutations on Omicron and its swift spread in South Africa indicated the present jabs would need to be tweaked, he indicated.

In foreign exchange, the euro rose on Tuesday as data showed inflation in the 19-nation single-currency area soared in November to more than double the European Central Bank (ECB) 2 per cent target.

Sky-high inflation has placed intense pressure on the ECB and the US Federal Reserve to rein in vast stimulus programmes — with traders also fearing premature interest rate hikes to tame prices.

However, the emergence this week of the Omicron mutant coronavirus strain has complicated the picture.

In Britain, meanwhile, traders are also reassessing hopes of a pre-Christmas interest rate hike.

Prior to Omicron, the Bank of England had been forecast to lift rates to dampen near decade-high UK inflation.

'Hopes are fading that the Bank of England will raise interest rates later this month,' noted Hargreaves Lansdown analyst Susannah Streeter, citing the uncertain impact of the new variant.

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