Travel stocks lead European markets lower amid heightened Omicron fears

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Travel and energy stocks lead European equity markets lower on Monday, as investors monitored the spread of the Omicron variant of Covid-19 and adopted a cautious approach ahead of a number of central bank policy decisions later in the week.

The pan-European benchmark STOXX 600 erased early session gains to end 0.4 per cent lower, marking its fourth consecutive day in the red.

Dublin

The Iseq index of Irish shares dropped 1.6 per cent to 8,048.13, with travel-related plays all out of sorts after the UK reported its first death from the Omicron coronavirus variant

Ryanair slid 4 per cent to €14.29, while the parent of Irish Ferries, Irish Continental Group (ICG) dropped 1.6 per cent to €2.28, hotel group Dalata fell 2.8 per cent and travel retail software provider Datalex reversed by 3.1 per cent.

Paddy Power’s parent, Flutter Entertainment, declined by 3.4 per cent to €124.40. The head of Flutter UK and Ireland, Conor Grant, highlighted in a blog post on Monday how the company is increasing customer safeguards, saying that the company “will not wait for regulation where there is clear evidence to act”.

Banking stocks were also out of sorts, with AIB down 1.5 per cent at €2.12, while Bank of Ireland lost 1.4 per cent to €4.85.

London

London’s FTSE 100 and FTSE 250, dropped 0.8 per cent and 1.2 per cent, respectively, to mark their worst session in two weeks.

Oil prices weakened on worries the new variant and related curbs would hit demand. Europe’s energy sector lost with Royal Dutch and BP down 2.2-2.7 per cent.

“Creeping headlines about the Omicron variant are weighing on traders’ minds,” said David Madden, market analyst at Equiti Capital.

Investor focus is on monetary policy decisions expected to be taken by the European Central Bank (ECB), the US Federal Reserve, the Bank of England and the Bank of Japan this week.

Underwhelming growth data and the fast-spreading variant have dampened expectations that the Bank of England would raise interest rates soon.

Wizz Air fell 4.2 per cent after HSBC downgraded its recommendation on the stock to reduce. Airlines have called for support after Omicron dented recovery hopes, according to a report.

Purplebricks Group slumped 20.9 per cent after the estate agent said it would delay its interim results and warned of a potential financial risk as it found problems with communications with tenants about deposit registrations.

Recruiting firm SThree Plc tumbled 13.2 per cent after saying its chief executive officer would step down due to personal reasons, despite expecting to post record annual profits as reopening spurred a hiring boom.

Europe

Vifor Pharma surged 18.5 per cent after the Swiss drugmaker and Australia’s CSL both confirmed they were talking about a potential merger.

Norwegian aluminium maker Norsk Hydro rose 2.7 per cent after raising its cost-cutting targets and announcing plans to pay a bigger dividend for 2021 following a jump in earnings.

Daimler Truck rallied almost 11 per cent, extending gains, after analysts at Citigroup started coverage of the stock with a buy rating.

New York

US stocks were lower in early afternoon trade on worries about the Omicron coronavirus variant ahead of the Federal Reserve meeting later this week, while investors watched Apple close in on $3 trillion (€2.7 trillion) in market valuation.

Travel-related stocks were generally lower, with Carnival Corp leading declines among cruise operators

Apple’s shares were lower by early afternoon, reversing gains from earlier after JP Morgan raised its price target on the iPhone maker’s stock to the highest on Wall Street. Market watchers have been keeping a close eye on the company’s market capitalisation as it recent sessions, as it comes close to becoming the first company in the world to hit $3 trillion in market value.

Elsewhere, Pfizer rose as it agreed to acquire Arena Pharmaceuticals in a $6.7 billion all-cash deal. Arena’s shares surged. – Additional reporting, Reuters

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