European markets retreat as omicron Covid variant fears return

LONDON — European stocks pulled back on Thursday as concerns persisted over the omicron Covid variant.

The pan-European Stoxx 600 fell 0.9% in early trade, with travel and leisure stocks shedding 1.8% to lead losses as all sectors and major bourses slid into the red.

Major markets across Asia-Pacific and the U.S. had bounced back Wednesday despite fears about the new variant and the Federal Reserve mulling a quicker-than-planned taper.

But global stocks appear to be struggling to regain momentum amid continuing uncertainty around the risks posed by the new omicron Covid variant, first spotted in South Africa last week and designated a “variant of concern” by the World Health Organization.

The WHO said on Wednesday that at least 23 countries from five of six WHO regions have now reported cases of omicron, “and we expect that number to grow.” It also noted that hospitalizations are rising across South Africa, but said it’s still too early to know whether the omicron variant is driving an increase in severe Covid-19 cases.

Asia-Pacific markets were mixed Thursday while U.S. stock index futures pointed to a higher open, after selling off on Wednesday as the CDC confirmed the first known case of the omicron variant in the U.S.. The first case of the heavily mutated variant was detected in northern California.

Data releases on Thursday include the euro zone unemployment rate for October and producer prices for the same month.