European stocks fall amid omicron vaccine fears; Stoxx 600 down 1%

LONDON — European stocks pulled back on Tuesday, with futures reversing themselves on new fears around the omicron Covid variant and vaccines.

The pan-European Stoxx 600 fell 1% in early trade, with oil and gas stocks dropping 1.8% to lead losses as all sectors and major bourses slid into negative territory.

The reversal came after Moderna CEO Stephane Bancel told the Financial Times that he expects existing vaccines to be less effective against the new variant. Bancel told CNBC on Monday that it could take months to develop and ship an omicron-specific vaccine.

He expressed some uncertainty about omicron, saying that will take at least two weeks to determine how much the mutations have impacted the efficacy of the vaccines currently on the market.

“Depending on how much it dropped, we might decide on the one hand to give a higher dose of the current vaccine around the world to protect people, maybe people at very high risk, the immunocompromised, and the elderly should need a fourth dose,” he said.

European and U.S. stocks had begun a tentative rebound on Monday following last Friday’s sell-off as concerns over the newly discovered omicron Covid variant appeared to ease.

In the U.S., stocks got a big boost after U.S. President Joe Biden said economic lockdowns in response to the omicron variant are currently off the table and there will be no new travel restrictions.

Covid symptoms linked to the omicron variant have been described as “extremely mild” by the South African doctor who first spotted the new strain. Nonetheless, the World Health Organization warned Monday that the omicron variant is likely to spread further and poses a “very high” global risk.

Stateside, investors are looking ahead to key economic data set to be released this week, including the November jobs report on Friday which is expected to show solid jobs growth. Economists surveyed by Dow Jones expect 581,000 jobs to have been added in November.

Earnings on Tuesday came from Easyjet, Greencore, SAS and Volvo Cars on Tuesday while data releases include flash inflation data for the euro zone in November, France’s final third-quarter gross domestic product data as well as German unemployment figures for November.

— CNBC’s Eustance Huang and Spencer Kimball contributed to this market report.