Wed. Jan 26th, 2022

Good morning. 

It looks like it could be another tricky day on the markets, with sentiment over the new omicron Covid strain souring overnight.

While oil and stocks regained some ground on Monday following last week’s sell-off, it seems the rebound may be short-lived.

It comes after downbeat comments from Moderna boss Stephane Bancel, who shunned the more optimistic noises coming from rivals such as Pfizer and BioNTech and warned current vaccines could struggle with the new strain.

5 things to start your day 

1) Accenture to create 3,000 cybersecurity jobs  Half of the roles will be based outside London in a vote of confidence in Britain’s growing tech industry

2) Twitter boss Jack Dorsey steps down  He said the social media platform needs to “break away” from his grip as its founder

3) AJ Bell woos young investors with no-commission trading app  The broker follows in Robinhood’s footsteps in wake of meme stocks trading frenzy

4) German inflation hits post-reunification high  The figure jumped to 5.2pc in November, up from 4.5pc the previous month, as energy bills rocket 

5) Afiniti founder quits investment firm in wake of sex assault claims  Zia Chishti stepped down from TRG Pakistan ahead of a board meeting to consider his future

What happened overnight 

Asian share markets weakened sharply in late trading Tuesday, giving up earlier gains as investors worried the Omicron variant will prove more resistant to vaccines and could cause more widespread global economic disruption.

The region’s trading followed a brighter lead from Wall Street on Monday which reacted positively to news from US President Joe Biden that new lockdowns as a result of the variant were off the table for now.

Positive sentiment though was replaced swiftly with a sudden burst of risk aversion in most major asset markets across Asia after the head of drugmaker Moderna told the Financial Times that Covid-19 vaccines are unlikely to be as effective against the Omicron variant of the coronavirus as they have been against the Delta variant.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.45pc lower on Tuesday.

In Australia, the S&P/ASX200 closed up 0.22pc after earlier being up 1.15pc. Japan’s Nikkei retraced all of its 1.2pc gains notched earlier in the session and turned negative later on Tuesday.

Hong Kong’s Hang Seng Index shed 1.86pc while China’s blue chip CSI 300 index was off 0.3pc.

Activity in China’s services sector grew at a slightly slower pace in November, official data showed on Tuesday, as the sector took a hit from fresh lockdown measures as authorities raced to contain the latest outbreak.

Coming up today

  • Corporate: EasyJet, Shaftesbury, Future, Greencore, Countryside Properties, Topps Tiles (Full-year results); Pennon, Discoverie (Interims); Micro Focus (Trading update)
  • Economics: PMI (US, China); consumer price index (EU); house price index (US); consumer confidence (US)

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