European stocks slip as omicron concerns persist; autos shed 1.3%


LONDON — European markets were slightly lower on Friday morning as concerns persisted about the spread of the omicron Covid-19 variant and the inflation outlook.

The pan-European Stoxx 600 fell 0.2% in early trade, with autos shedding 1.3% to lead losses while household goods gained 0.4%.

European stocks were coming off a strong session Thursday as investors reacted positively to central bank policy decisions. The Federal Reserve on Wednesday announced that it would be aggressive on tapering bond purchases and sees several rate hikes in 2022.

The Bank of England followed suit by hiking interest rates for the first time since the start of the pandemic, citing a strong labor market and the need to return inflation towards its 2% target. November’s reading came in at a 10-year high of 5.1% annually.

The European Central Bank struck a more dovish tone, further cutting its pandemic-era bond buying program but vowing to stay accommodative through 2022 and beyond.

However, with inflation running at more than double target in the U.S., euro zone and the U.K., concerns are lingering as to whether it can be brought under control.

Meanwhile, the omicron variant is spreading at an alarming rate, with countries across Europe implementing containment measures in a bid to avoid a tsunami of cases. The U.K. reported nearly 90,000 cases in a single day on Thursday, but daily deaths remain relatively stable.

Markets in Asia-Pacific were mostly lower overnight, with stocks in Japan and India leading losses.

Stateside, stock futures pointed to a lackluster open on Wall Street Friday, after the tech-heavy Nasdaq Composite fell 2.47% during regular trading for its worst day since September.

On the data front, November’s euro zone harmonized inflation figures are due Friday morning.

In terms of individual share price movement, Italian biotech firm DiaSorin saw its shares slide more than 7% in early trade to the bottom of the Stoxx 600, as investors balked at its 2022-2025 business plan.

At the top of the index, German kitchen appliance manufacturer Rational climbed 3.3% after Deutsche Bank upgraded the stock to “hold” from “sell.”

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