European Stocks Mixed; U.K. Underperforms as Omicron Confidence Rises

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European Stocks Mixed; U.K. Underperforms as Omicron Confidence Rises

By Peter Nurse - European stock markets traded in a mixed fashion Thursday, helped by renewed confidence in the region’s economic recovery despite the surge of Omicron variant cases.

At 3:45 AM ET (0845 GMT), the DAX in Germany traded 0.3% higher, the CAC 40 in France rose 0.1%, while the U.K.’s FTSE 100 underperformed, dropping 0.1%. 

AstraZeneca (NASDAQ: AZN ) stated Thursday that a three-dose course of its Covid-19 vaccine is effective against the Omicron coronavirus variant, citing data from an Oxford University lab study.

This follows on from a couple of studies released Wednesday, one from the National Institute for Communicable Diseases and major universities in South Africa and another from Imperial College London, suggested reduced risks of hospitalization and severe disease in people infected with the Omicron coronavirus variant versus the Delta one, the previous dominant strain.

New data from the U.K. Health Security Agency on the severity of the Omicron variant is set to be published later Thursday. 

Helping the tone was Spain revising its economic growth in the third quarter sharply higher, with its gross domestic product growing 3.4% from a year ago, more than the 2.7% initially estimated.

Earlier Thursday, Japan upgraded its growth projections for the next fiscal year starting in April, expecting the fastest growth since fiscal 2010.

That said, gains are likely to be limited Thursday with many investors on holiday and with the Omicron variant causing infections to double in 1.5 to 3 days, according to the World Health Organization. 

The U.K. recorded over 100,000 daily cases on Wednesday for the first time ever, causing the FTSE 100 to underperform Thursday. 

Travel-related stocks all profited from the news on Omicron, with British Airways owner IAG (LON: ICAG ) rising 4.8%, Jet2 (LON: JET2 ) stock rising 5.2% and Wizz Air (LON: WIZZ ) stock rising 4.4%. Ryanair Holdings  (DE: RYA ) stock underperformed, rising only 0.4% after the company nearly doubled its forecast net loss for the current financial year due to the continental bans on British tourists announced earlier this month.

In corporate news, Holcim (SIX: HOLN ) stock rose 2.3% after the Swiss building materials company said it was aiming to buy residential roofing maker Malarkey Roofing Products in a deal valued at $1.35 billion to expand into the growing U.S. residential roofing market.

Flutter Entertainment (LON: FLTRF ) stock gained 2.5% after announcing it would buy Italian online gaming operator Sisal for 1.62 billion pounds ($2.16 billion), as the online betting group looks to expand its footprint in Europe.

Oil prices weakened slightly Thursday, giving back some of the previous session’s gains on the back of a sharp decline in U.S. crude stockpiles.

The Energy Information Administration reported late Wednesday that crude inventories declined 4.72 million barrels last week, the fourth consecutive weekly draw. This was even larger than the drop reported by the American Petroleum Institute on Tuesday, with the industry body indicating that crude stocks fell by 3.67 million barrels.

By 3:45 AM ET, U.S. crude futures traded 0.5% lower at $72.39 a barrel, closing Wednesday above $72 for the first time in two weeks, while the Brent contract fell 0.5% to $74.88. 

Additionally, gold futures rose 0.3% to $1,807.85/oz, while EUR/USD traded 0.1% lower at 1.1316.


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