(Bloomberg) — European equities fell as worries over omicron’s spread reining in global growth along with fears over the pullback of stimulus weighed on the sentiment.
The Stoxx 600 Index was down 0.3% by 8:04 a.m. London time. Travel and leisure and automakers were among the biggest decliners, while technology was also under pressure following yesterday’s drop in the Nasdaq 100.
European equities had gained on Thursday as central banks reassured investors that the withdrawal of monetary stimulus will be gradual. The relief was short-lived, however, as a more hawkish approach from the Federal Reserve hit stocks that are more richly-valued, such as tech.
Virus risks are also in focus as Wales will bring back social distancing rules in offices and close nightclubs after Christmas, adding pressure on U.K. Prime Minister Boris Johnson to introduce tougher measures in England.
Aneeka Gupta, research director at WisdomTree, said that, while the backdrop is much better from a growth perspective, there is still the risk posed by omicron and other virus variants in the background.
“We definitely see there’s going to be volatility going into 2022, and that could emanate from inflation, it could even crop up from geopolitical risk,” Gupta said by phone. “It’s definitely going to be a tricky path to navigate in 2022.”
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