Global markets dip as Moderna chief sounds alarm on Omicron

A healthcare worker holds a vial of the Moderna Covid-19 Vaccine at a pop-up vaccination site operated by SOMOS Community Care during the coronavirus disease (COVID-19) pandemic in Manhattan in New York City, New York, U.S., January 29, 2021. (REUTERS/Mike Segar)

Alarming comments over the potential severity of the Omicron variant made by the chief of a leading Covid vaccine maker spooked markets today.

The capital’s premier FTSE 100 index dipped 0.25 per cent to 7,082.19 points, while the mid-cap FTSE 250 index, which is more aligned to the health of the UK economy, fell 0.37 per cent to 22,671.78 points.

Global markets plunged at the open today as investors poured out of equities and back into safe haven assets after the chief executive of Moderna gave an interview to the Financial Times in which he predicted existing vaccines would be less effective against the Omicron variant.

“I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to . . . are like, ‘This is not going to be good’,” said Stephane Bancel.

The downbeat comments triggered an immediate selloff when markets opened today. However, the world’s major indexes have since recovered some losses.

Germany’s Dax 30 dipped 0.33 per cent, while the pan-European Stoxx 600 index fell by the same amount.

Asian shares suffered heavier blows in overnight trading. Japan’s Nikkei closed 1.63 per cent lower and Hong Kong’s Hang Seng lost 1.58 per cent.

Analysts were at pains to take Bancel’s comments with a pinch of salt.

“In reality, the evidence is still incredibly limited on this question, and nothing from the Moderna chief executive overnight changes that,” Deutsche Bank analysts said.

“This is not really new news relative to the last 3-4 days given what we know about the new mutation but the market is picking up on the explicit comments,” they added.

Travel stocks continued their ascent due to sentiment toward the sector clouding over concerns further travel restrictions could be imposed if the Omicron variant is deadly.

British Airways owner IAG fell 1.83 per cent and Intercontinental Hotels Group dropped 2.30 per cent.

Fellow airlines easyJet plunged 1.37 per cent and Premier Inn owner, Whitbread, was down over one per cent during afternoon trading.