LONDON MARKET OPEN: Mood switches again after Omicron detected in US

(Alliance News) - A sell-off in New York on news that the Omicron coronavirus variant has reached the US led to similar stock-market tumbles in Europe, the FTSE 100 once again reversing course to drop nearly 60 points at the open on Thursday.

The FTSE 100 index was down 59.04 points, or 0.8%, at 7,109.64 early Thursday, coming off a 1.6% rise on Wednesday.

The mid-cap FTSE 250 index was down 168.87 points, or 0.7%, at 22,743.86 in morning trade. The AIM All-Share index was down 3.56 points, or 0.3%, at 1,192.49.

The Cboe UK 100 index was down 0.6% at 706.02. The Cboe 250 was down 0.6% at 20,226.87, and the Cboe Small Companies down 0.2% at 14,822.25.

In mainland Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt were both down 1.2% early Thursday.

Stocks in Europe followed Wall Street lower after the US reported its first Omicron case, sparking fresh panic.

According to a statement by the Centers for Disease Control & Prevention, the person, who was fully vaccinated, returned from South Africa on November 22 and tested positive on November 29.

"We feel good that this patient not only had mild symptoms, but actually the symptoms appear to be improving," said top health official Anthony Fauci.

While the person involved was fully vaccinated, Fauci stressed a Covid booster remained a good idea because it raises the number of overall antibodies in a person's immune system, some of which will remain effective at stopping new variants.

"The news exacerbated what had been a cautious recovery from the initial waves of the pandemic, with concerns already in place that some were holding back from joining the workforce until social confidence returned. The latest news will likely harm the brittle confidence of the consumer and markdowns were in evidence across each of the major indices," said Richard Hunter, head of markets at interactive investor.

The downbeat mood carried into Asia. The Nikkei 225 index in Tokyo ended down 0.7%. In China, the Shanghai Composite ended down 0.1%, while the Hang Seng index in Hong Kong closed up 0.6%. The S&P/ASX 200 in Sydney lost 0.2%.

GlaxoSmithKline was one of just a handful of stocks in the FTSE 100 to trade in the green early Thursday, up 0.4% in opening trade.

The pharmaceutical company provided some optimism about the worrying new coronavirus variant by reported that sotrovimab, an investigational monoclonal antibody treatment for Covid-19, retains activity against key mutations of Omicron.

The findings were generated through pseudo-virus testing of specific individual mutations found in Omicron. GSK, alongside collaboration partner Vir Biotechnology, are now completing in vitro pseudo-virus testing to confirm the results. An update is expected by the end of 2021.

"Though early, these pre-clinical data support our long-held view on the potential for sotrovimab to maintain its activity as the virus continues to mutate," said Hal Barron, chief scientific officer & president for R&D at GSK.

Separately, the UK Medicines & Healthcare products Regulatory Agency on Thursday said it has authorised sotrovimab to treat people with mild to moderate Covid-1 at high risk of developing severe disease.

At the bottom of the index was Royal Mail, down 5.8% as the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.

Trailing in the FTSE 250 was cruise operator Carnival, the stock hit by the latest Omicron setback. Shares were down 5.2% in morning trade.

Aston Martin fell 4.2%. The luxury car maker said Kenneth Gregor is stepping down as chief financial officer for personal reasons, departing no later than June 30. Aston Martin has started looking for his successor.

Investment platform AJ Bell was down 3.7%, despite rewarding shareholders with a special dividend after a record year for financial results.

AJ Bell's total customers rose by 30% to 382,754 and assets under administration grew to stand at GBP72.8 billion on September 30, up 29% from a year ago. Revenue in the financial year increased 15% to GBP145.8 million and pretax profit expanded 13% to GBP55.1 million.

AJ Bell raised its final dividend by 13% to 4.50p and, in light of the strong results, also declared a special payout of 5.00p. This took the year's total dividend to 11.96p, nearly double the 6.16p paid out for the year before.

North Sea benchmark Brent oil was trading at USD69.84 a barrel early Thursday, down against USD71.88 late Wednesday.

Major oil producers are due to meet Thursday to decide on output levels from January onwards, which could be frozen as the new Covid variant Omicron sparks turmoil.

The OPEC+ alliance led by Saudi Arabia and Russia has so far resisted US-led pressure to significantly boost output to rein in surging energy prices. The emergence of the new variant has further complicated the equation, leading to countries reinstating travel bans and mulling further restrictions that could tighten demand and hurt oil prices.

The 13 members of the Organization of the Petroleum Exporting Countries and their 10 allies are due to meet from 1300 GMT via video conference after technical discussions.

Elsewhere, the economic events calendar on Thursday has eurozone producer prices at 1000 GMT and the latest US jobless claims numbers at 1330 GMT.

Sterling was quoted at USD1.3291 early Thursday, falling from USD1.3315 at the London equities close on Wednesday.

The euro traded at USD1.1319, soft against USD1.1325 late Wednesday. Against the yen, the dollar firmed to JPY113.28 versus JPY113.02.

Gold was quoted at USD1,772.82 an ounce, lower than USD1,785.55 on Wednesday.

By Lucy Heming; lucyheming@alliancenews.com

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