Wednesday, February 1, 2023
HomeBusinessThe stocks and oil markets have been battered by the Omicron panic

The stocks and oil markets have been battered by the Omicron panic

LONDON: Investor concern over the impact of global steps to limit the fast-spreading Omicron coronavirus type led to a drop in global equities and oil markets on Monday, according to dealers.

Concerns over a new global rise in coronavirus infections sent Asian stocks down, igniting a ferocious new selloff in Europe, and Wall Street was also down at the opening bell.

Also read: WHO says Omicron spreads quicker and degrades vaccinations

Oil fell more than 5% as traders worried about the impact on the world’s desire for energy, which had already been hit hard since the outbreak broke out early last year.

Sentiment was jarred by the future of US President Joe Biden’s massive social spending bill after it lost the crucial vote of a moderate Democrat. The British pound fell sharply after the surprise weekend departure of Prime Minister Boris Johnson’s Brexit minister David Frost.

“After battling endless headwinds in recent weeks, markets have finally been knocked over as the rapid spread of Omicron finally reaches panic mode,” said AJ Bell investment director Russ Mould. “Tighter restrictions across parts of Europe and fears that we could see a circuit breaker in the UK have put a chill in the air for investors.”

Meanwhile, the EU’s drug regulator approved a fifth Covid jab as the United States warned of a bleak winter with the Omicron variant spurring new waves of infections globally. Since it was first reported in South Africa in November, Omicron has been identified in dozens of countries, prompting many to reimpose travel restrictions and other measures.

The Netherlands imposed a Christmas lockdown and Germany tightened restrictions notably affecting the unvaccinated, while media speculation swirls over the re-imposition of tougher UK curbs.

The rapid spread of Omicron has also slammed the oil market and travel stocks as a return to containment measures and travel curbs would hit the aviation and tourism industries as well as dampen demand for fuel.

Also read: The first’suspected case’ of Omicron variant in Pakistan has been reported in Karachi

“Stocks and crude oil have sold off as the markets start the final week before Christmas with a whimper,” added ThinkMarkets analyst Fawad Razaqzada.

“There is some de-risking in the face of headline news that has market participants thinking the Omicron Grinch might steal Christmas after all,” said analyst Patrick J. O’Hare at

With traders beginning to wind down ahead of the festive season, analysts said trade was thinner and markets more susceptible to swings, but the mood has become increasingly glum as central banks start paring their huge financial support to fight inflation.



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