Europe midday: Shares pare losses but Omicron fears still weigh

by | Dec 20, 2021

European markets pared losses at midday on Monday, but were still sharply lower as fears over the rapid spread of the Omicron Covid-19 variant hit sentiment.
The pan-regional Stoxx 600 index was down 1.49% with all major bourses lower as the Netherlands went into full-lockdown and other governments considered tightening restrictions in order to ease pressure on strained public health services.

France and Germany imposed bans on arrivals from the UK, while in Ireland, the government ordered all bars, restaurants, and cinemas must close by 8pm.

Oil prices fell sharply in Asia overnight, while investors also fretted over new difficulties faced by US President Joe Biden’s $1.75trln investment bill. Democrat Senator Joe Manchin controversially rejected the plan, citing concerns about rising inflation.

As a result, Goldman Sachs cut US real GDP forecast for the first quarter of 2022 to 2% from 3% previously, and marginally reduced forecasts for the second and third quarters.

Elsewhere, China cut its lending benchmark rate for the first time in 20 months to prop up its slowing economy, sending the yuan to a 10-day low.

In equity news, shares in Novo Nordisk plunged 10% after the Danish drugmaker said it would not be able to meet demand for its new obesity drug due to US supply issues.

Shares in immunology group Argen-X rose 8.5% after its Vyvgart treatment for autoimmune disease received US approval.

Bakkafrost shares fell to the bottom of the Stoxx after the Faroese salmon farmer reported further exceptional mortalities at its Scottish sites during the fourth quarter and forecast a hit to annual earnings.

THG shares rallied, bucking the overall trend, after The Sunday Times reported that research firm The Analyst had withdrawn its short recommendation on the stock.

In October, The Analyst had recommended that clients open short positions on THG on the basis that its Ingenuity ecommerce platform was grossly overvalued. It also noted concerns around the company’s corporate governance and argued that cashflows were deteriorating.

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