Tech, healthcare stocks lead European shares lower as Omicron cases swell

  • 12/29/2021
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Banks, tech outperform STOXX 600 YTD Deutsche Bank slips on BaFin"s ~$10 mln fine Global COVID-19 infections hit a record high Dec 29 (Reuters) - European shares inched lower on Wednesday as record coronavirus infections made investors wary and falls in technology, healthcare and travel stocks led the selling in thin holiday trade. The pan-European STOXX 600 (.STOXX) slipped 0.1% with healthcare stocks Novo Nordisk (NOVOb.CO), Novartis (NOVN.S) and Roche among the biggest drags on the index, although the technology sub-index (.SX8P) fell the most, down 1.1%. Most other European bourses fell. Germany"s DAX (.GDAXI), France"s CAC 40 (.FCHI) and Spain"s IBEX (.IBEX) shed between 0.7% and 0.2% with only Britain"s FTSE 100 (.FTSE) gaining 0.6%. Global COVID-19 infections hit a record high over the previous seven-day period, Reuters data showed on Wednesday, as the Omicron variant raced out of control, keeping workers at home and overwhelming testing centres. read more "Europe"s restrictions will have a tail impact, but for now, markets are overwhelmingly pricing in the (Omicron) variant as a milder incarnation, despite its easier contractibility," said Jeffrey Halley, senior market analyst at OANDA. Wall Street strengthened, however, and oil prices edged higher as optimism outpaced concerns around the impact of Omicron on global economies. Britain"s FTSE 100 (.FTSE) jumped 0.6% on higher oil prices and as traders ruled out a lockdown in the country before the year-end. "With market activity reduced for the holiday season, investors continue to tentatively price in a global recovery hitting a minor bump, and not a pothole," Halley added. The STOXX 600 has largely had a bull run in 2021 in response to accommodative monetary policy and stimulus measures, with tech (.SX8P) and financial stocks (.SX7P) seeing the highest gains. However, analysts have mixed views going into 2022 as inflation fears, COVID-19 risks and an energy crunch persist. Many believe inflation will pressure central banks to exit from policy accommodation sooner than expected. Deutsche Bank (DBKGn.DE) fell 1.4% after the German financial regulator said it had fined the bank about $10 million for controls related to the Euro Interbank Offered Rate, a setback for the nation"s largest lender in its attempts to restore its reputation. read more BPER Banca (EMII.MI) added 0.7% after agreeing to hire 550 staff and make 300 temporary contracts permanent on top of 1,700 exits that Italy"s fifth-largest bank already announced in September. Germany"s BMW fell 0.8% on plans to create up to 6,000 jobs next year to prepare for growing demand for its electric vehicles, the carmaker"s chief executive told daily Muenchner Merkur.

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