The pan-European Stoxx 600 closed 0.7% lower temporarily, as it gave back earlier gains of approximately 0.6%. Tech stocks plummeted 2.1% to lead losses as sectors and major bourses are mainly trading in the red.
European stocks sank Monday as traders responded to the surge of the omicron variant. UK Prime Minister Boris Johnson confirmed that one patient at the very least has died of the omicron infection in the country.
Mainland China reported its first omicron case Monday in Tianjin. Investors are braced for the central bank action with the US. Moreover, the Bank of Japan, the Bank of England, the Federal Reserve, and the European Central Bank will announce monetary policy decisions.
The Fed Reserve’s two-day policy meeting starts Tuesday; policymakers are expected to discuss speeding up the end of the bond-buying program.
The meeting is followed by the rise in inflation, consumer prices climbing 6.8% in November year-over-year, highest since 1982.
The market’s inflation enhanced more as the November producer price index increased by 9.6, the fastest pace on record and above expectations.
On Wall Street, US stocks declined with traders taking in the recent inflation numbers and waiting for the Fed’s decision.
Coming back to Europe, UK employment data stayed strong in November, with 257,000 staff added to payrolls, signaling the smooth end to the government’s furlough scheme.
If it were not for the emergence of Omicron, the UK labor market report would be enough to convince the Bank of England to increase interest rates at Thursday’s meeting, according to global market strategist, Hugh Gimber, JPMorgan Asset Management.
But unfortunately, Covid is here to confuse matters yet again. As Omicron poses near-term risks to the growth outlook and the efficacy of the vaccines is still uncertain, policymakers are expected to opt to keep rates on hold for the week, hoping that the outlook will become clearer by February.
Talking of individual share price movement, Vifor Pharma shares climbed 12.6% as Australian pharmaceutical CSL offered to buy the company for $11.7 billion.
Ocado, a British digital supermarket, surged 5.5%, followed by a strong earnings report and a win in a patent infringement lawsuit against Autostore, Norwegian robotics.
Coming at the bottom of the European blue-chip index,
Rentokil dropped 12.3% after they agreed to buy US rival Terminix for $6.7 billion.
Britain’s BT Group sank 4.3% after Altice UK increased its stake in the company to 18% from 12.1%.