European and Asian Markets Hit Hard by Omicron Variant

UTC by Tolu Ajiboye · 3 min read
European and Asian Markets Hit Hard by Omicron Variant
Photo: Unsplash

The relentless spread of the Omicron variant has adversely impacted European and Asian markets, even oil prices too.

The European stock index STOXX 600 slid by 2.3% in pre-trading on Monday, December 20th as the Omicron coronavirus variant ravages in the European markets. Also, travel and leisure stocks dropped 3.3% to lead losses, in particular, trading in red across the board. Also, London’s FTSE 100 declined by 1.7%, while France’s Cac 40 shed 1.8%. According to Deutsche Bank strategist Jim Reid, Omicron is one of the biggest issues plaguing the markets right now. Reid says the new variant has “clouded the outlook moving into year-end.”

Asian markets stocks also took a hit, with Hong Kong’s Hang Seng index declining by 1.9%. Meanwhile, China had to cut its benchmark lending rate for the first time in over a year and a half. In addition, Chinese stocks also closed lower, with the Shanghai composite falling to 3,593.60 – a 1.07% decline. The Shenzhen component also dropped by 2.007% to 14,569.18. Furthermore, the Nikkei 225 of Tokyo was trading 2.1% lower for the same period, while the Topix index declined 2.17% to 1,941.33. South Korea’s Kospi closed at 1.81% lower at 2,963, while Australia’s S&P/ASX 200 slid 0.16% to 7,292.20.

Oil prices were also lower during Asian trading afternoon hours. For instance, Brent crude futures declined 3.25% to $71.13 per barrel, while US crude futures dropped 3.71% to $68.23 per barrel.

Omicron Variant Taking a Toll Across European Markets and the US

On Sunday, the Netherlands became the first EU member to re-institute a full nationwide lockdown until mid-January next year. Furthermore, other European nations are also looking to swiftly take a similar course of action due to the unprecedented viral surge.

The German government also tightened travel restrictions over the weekend. Starting from today, it said it will only grant access to German citizens, residents and transit passengers coming from the UK. Furthermore, all incoming travelers would have to quarantine for two weeks regardless of vaccination status. Germany also instituted travel restrictions on arrivals from France, Denmark, and Norway. Meanwhile, neighboring Austria says it will only admit vaccinated travelers into the country starting on Monday.

Currently, the UK government is contemplating whether to once again shutter outdoor places before Christmas. According to the country’s health secretary Sajid Javid, it was “time to be more cautious”. Ireland also effected an 8 pm curfew for pubs and restaurants.

According to Tapas Strickland, a director of economics at NAB, Omicron threatens to taint the holiday period for much of Europe. As Strickland put it:

“Omicron is set to be the Grinch who stole Europe’s Christmas. With Omicron cases doubling every 1.5-3 days, the potential for hospital systems to be overwhelmed even with effective vaccines remain.”

Omicron in the US

In the US, the need for vaccination and booster shots is more crucial than ever before for traveling Americans. This is according to chief White House medical adviser Dr. Anthony Fauci. So far, the Omicron variant has been found via testing in an overwhelming majority of US states – 43 out of 50. This has resulted in a rapid rise in hospitalization cases and the subsequent cancellation or rescheduling of sports shows and entertainment features. As a result, Fauci believes that Omicron will eventually replace Delta as the dominant type in the US.

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