Here are today’s main stories:

After a turbulent day, stock markets across Europe have ended lower.

Shares were hit by worries about the Omicron variant, following the warning from Moderna’s CEO about vaccine efficacy.

The prospect of America’s central bank ending its stimulus bond-buying programme sooner than expected also hit stocks.

The UK’s FTSE 100 index has closed 50 points lower at 7059 points, wiping out most of Monday’s recovery.

That means it has lost 2.5% during November, mainly due to last Friday’s plunge, the worst month since October 2020.

Mining stocks led the risers, while fallers included catering group Compass (-3.9%), InterContinental Hotels (-3.3%).

Germany’s DAX lost 1.2%, and France’s CAC fell by 0.8%, while Spain’s IBEX lost 1.8%.

Danni Hewson, AJ Bell financial analyst, says that Covid-19 uncertainty weighed on the markets today.

It’s difficult for investors to figure out what moves to make when even the clever folk that make vaccines seem to be at odds over exactly where we are when it comes to fighting the fight against Omicron. Will existing vaccines work? Will they need to be tweaked? How quickly can that happen? So many questions troubling markets, governments, and people. Of the big pharma Covid names only Pfizer’s been in positive territory with its share price after the boss said it was not only working on a vaccine with the new variant in mind but that it was confident its Covid treatment pill would already be effective against Omicron.

“Whether it was variant vagaries or a taper tantrum, Wall Street’s main indices declined in some choppy trading waters. Increased restrictions might give central banks pause but the pressure of inflation won’t just pop gently out of existence and there was very little joy to be had particularly on the Nasdaq, which struggled to find a stock on the rise in early trading.

Shares are falling faster in New York too, where the Dow is now down 600 points.

Fed chair Jerome Powell has jolted the markets, by indicating that the central bank could wind up its stimulus programme faster than planned.

In his testimony to the Senate Banking Committee, Powell said it could be appropriate to wrap up the Fed’s bond-buying programme more speedily, despite the omicron variant.

“At this point, the economy is very strong, and inflationary pressures are high.

“It is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at our November meeting, perhaps a few months sooner.”

The Fed decided to cut its $120bn/month bond-buying stimulus programme by $15bn this month, and again in December. At that pace, the tapering would end in June.

Powell, though, is signaling a faster taper - which could hurt asset prices, which have benefited from the Fed’s money-printing.

The dollar has now jumped higher, wiping out its earlier losses and pulling the pound down to a new 11-month low of $1.323.

The co-founder of BioNTech, which created Pfizer’s Covid-19 vaccine, has predicted that vaccinated people will still be protected from severe disease from Omicron.

Ugur Sahin said that while the variant could lead to more infections, vaccinated people are likely to remain protected from becoming severely ill, so governments should press on with rolling out booster shots, fast.

That’s an encouraging prediction, which could offer reassurance to those concerns about Omicron.

The Wall Street Journal has the story:

The Omicron variant of the coronavirus could lead to more infections among vaccinated people but they will most likely remain protected from a severe course of illness, according to the inventor of one of the first Covid-19 vaccines.

While the new variant might evade the antibodies generated in reaction to the vaccine, the virus will likely remain vulnerable to immune cells that destroy IT once it enters the body, BioNTech SE co-founder Ugur Sahin said.

“Our message is: Don’t freak out, the plan remains the same: Speed up the administration of a third booster shot,” Dr. Sahin said in an interview Tuesday.

Based on current knowledge about the mechanisms behind the vaccine and the biology of variants, Dr. Sahin said he assumed that immunized people would have a high level of protection against severe disease even if infected by the Omicron variant.

U.S. consumer confidence slipped in November amid concerns about the rising cost of living and the ongoing pandemic.

The Conference Board’s gauge of consumer morale dropped to 109.5 this month from 111.6 in October. That’s a bigger drop than forecast, to the lowest level since February.

The survey was conducted before the discovery of Omicron was announced last week.

It shows that concerns about inflation were already hitting confidence, with people less optimistic about economic prospects, and the current situation.

The Present Situation index fell to 142.5 in November from October’s downwardly revised reading of 145.5 from 147.4. Meanwhile, the US Consumer Expectations index fell to 87.6 in November from 89.0 in October.

Concerns that the omicron variant will hit energy demand are pulling the oil prices lower.

Brent crude is now down 3.5% today at $70.86 per barrel, the lowest since the start of September, amid fears of new travel restrictions and other curbs.

Oil has fallen steadily since Brent hit three-year highs in October, following the rise in Covid-19 cases in Europe.

Craig Erlam, analyst at OANDA, says oil prices are unsurprisingly taking another hit as risk sentiment turns negative once again.

Brent crude is closing in on $70 now - which looks a big support level - as traders continue to fret about the efficacy of the current vaccines and what it means for the global economy in the coming months. WTI has slipped below but could see some support around $67 after such a severe drop.

America’s top central banker will warn today that omicron threatens the economic recovery.

Jerome Powell, chair of the Federal Reserve, is testifying to the U.S. Senate Banking Committee at 3pm UK time (10am New York). His prepared testimony was released last night, and shows that he will cite the pick-up in infections, and the latest Covid-19 variant, as risks.

Powell, who was nominated for a second term as Fed chief last week, will say:

The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.

Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.

Powell will also tell senators that the US economy has continued to strengthen, but the rise in Delta variant cases temporarily slowed progress over the summer.

Powell can expect a grilling on inflation, which hit a 30-year high of 6.2% last month.

He will say:

Most forecasters, including at the Fed, continue to expect that inflation will move down significantly over the next year as supply and demand imbalances abate.

It is difficult to predict the persistence and effects of supply constraints, but it now appears that factors pushing inflation upward will linger well into next year. In addition, with the rapid improvement in the labor market, slack is diminishing, and wages are rising at a brisk pace.

GSK has hired one of the scientists behind Pfizer’s mRNA Covid-19 shot, Phil Dormitzer, as its global head of R&D for vaccines.

Dormitzer will join GSK on December 3rd, in a move that bolsters the British pharmaceuticals firm’s vaccine operations.

Dormitzer was Pfizer’s Vice President and Chief Scientific Officer, RNA and Viral Vaccines.

In that role, he provided “Pfizer scientific leadership for the development of Comirnaty, the RNA-based Pfizer-BioNTech COVID-19 vaccine”, says GSK.

The company has lagged behind rivals in the race to develop a Covid-19 shot, and been under pressure to develop a portfolio of new medicines, so poaching Dormitzer from Pfizer could strengthen its efforts.

Hal Barron, GSK chief scientific officer and R&D president, says:

The importance of vaccines has never been clearer, and the pace of technological innovation has rarely been greater.

GSK has an industry-leading pipeline of vaccines and Phil’s scientific expertise and significant experience with key innovative technologies, such as mRNA, structure-based antigen design and synthetic biology, will be key to ensuring we remain a leader in this field.”

The chief executive of the US drugmaker Moderna has predicted that existing vaccines will be less effective against Omicron than they have been against the Delta version, sending global stock markets sharply lower.

Stéphane Bancel said while it would take two weeks to get data on how the existing vaccines perform against the new Covid variant – and whether it causes severe disease – it would take several months to tweak the current vaccines to tackle Omicron.

Bancel told the Financial Times.

“There is no world, I think, where [the effectiveness] is the same level … we had with Delta.”

He suggested that pharma companies would struggle between targeting Omicron and the existing Covid variants, warning it would be risky to shift Moderna’s entire production capacity to an Omicron-specific jab.

In the meantime, Bancel suggested there might be a case for giving more potent boosters to the elderly or people with compromised immune systems.

Pfizer and its German partner BioNTech said on Friday that they could produce and ship an updated version of their vaccine within 100 days if the new Covid variant detected in southern Africa was found to evade existing immunity.

Bancel said the high number of Omicron mutations on the spike protein, which the virus uses to infect human cells, and the rapid spread of the variant in South Africa suggested existing vaccines would not be very effective, predicting a “material drop” in the effectiveness.

Here’s the full story:

Britain’s competition watchdog has ordered Facebook to sell Giphy, after finding that the deal could harm social media users and UK advertisers.

The Competition and Markets Authority has concluded that Facebook’s acquisition of Giphy would reduce competition between social media platforms, and that the deal has already removed Giphy as a potential challenger in the display advertising market.

This follows an investigation into the $400m purchase of the online gif platform in 2020 by Facebook (now Meta).

The CMA says owning Giphy will allow the social media giant to increase its already significant market power in relation to other social media platforms, in two ways:

• denying or limiting other platforms’ access to Giphy GIFs, driving more traffic to Facebook-owned sites – Facebook, WhatsApp and Instagram – which already account for 73% of user time spent on social media in the UK,
  
  
• changing the terms of access by, for example, requiring TikTok, Twitter and Snapchat to provide more user data in order to access Giphy GIFs.

So, the CMA says Facebook must now sell Giphy, which is the biggest provider of short animated images popular on social networks and group chats.

Stuart McIntosh, chair of the independent inquiry group carrying out the phase 2 investigation, said:

The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market.

Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs.

By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.

Eurozone inflation soared to a record rate this month, driven by surging energy costs.

Consumer prices in the single currency bloc accelerated to 4.9% in November, new estimates from Eurostat show, the highest since the eurozone was created in 1999.

That’s a sharp jump on October’s inflation reading of 4.1%, and ahead of expectations for 4.5%.

It’s also significantly above the European Central Bank’s target of 2%.

Energy prices played the biggest role, surging by 27.4% year-on-year, but other costs also rose, in a sign that underlying inflationary pressures built up.

Services prices rose by 2.7%, goods by 2.4%, and food, alcohol & tobacco by 2.2%.

Data yesterday showed that inflation in both Germany and Spain is running at the highest in 30 years.

Core inflation (stripping out volatile measure) also hit a record high.

Budget airline easyJet has said near-term bookings had weakened since the new Omicron variant was identified amid concerns over travel restrictions.

However, easyJet still expects passenger numbers to return to close to pre-pandemic levels by the end of the summer.

The airline reported a loss before tax of £1.1bn for the year to 30 September, wider than the £835m loss made in 2020, but the figure was better than analysts had expected.

Johan Lundgren, the chief executive, said that while “many uncertainties remain as we navigate the winter”, the airline expects to benefit from a bounce back.

“We’re seeing very strong demand into next summer” Lundgren said, “because there is very strong pent-up demand. We have more revenue for next summer than we had at this point in time for the summer of 2019.”

Commenting on demand since the new variant emerged, easyJet said:

“It’s too soon to say what impact Omicron may have on European travel and any further short-term restrictions that may result.

“However, we have prepared ourselves for periods of uncertainty such as this. While we’ve seen an increase in transfers with some softening of trading for the first quarter [October to December] it is really encouraging to see that we are still seeing good levels of new bookings for the second half.”

Here’s the full story:

EasyJet shares had gained 2%, as Victoria Scholar of interactive investor flags, but have now dipped 1.7% as the markets slide.

The UK’s blue-chip stock index has dropped 1% at the start of trading.

The FTSE 100 has lost 75 points, or 1%, at the open to around 7,035 points, its lowest since 7th October, as renewed Omicron worries hit shares.

That knocks out yesterday’s recovery, but it’s nowhere near as severe as Friday’s 266-point plunge.

Most stocks have dropped. Retail group JD Sports are the top faller, down 4.5%, while pharmaceuticals group AstraZeneca is off 2%.

Sports betting and gambling group Entain are down 2.3%, with equipment rental business Ashtead (-2.1%) and hotel chain InterContinental (-2.4%) also lower.

The oil price has dropped to its lowest level since mid-September, on renewed worries that Omicron could slow the global recovery.

Brent crude is down 2.8% at $71.40 per barrel, an 11-week low. It plunged over 10% on Friday, when concerns about the variant first hit markets, before stabilising yesterday.

Moderna CEO Stephane Bancel’s comments have dampened the mood in the markets, says Michael Hewson of CMC Markets:

Cautious positivity soon gave way to pessimism in late Asia trading on comments from the Moderna CEO Stephane Bancel to the FT, who predicted existing vaccines would struggle with the Omicron variant and who warned it would take months for pharmaceutical companies to manufacture enough jabs at a sufficient scale to make a difference.

His tone contrasts with the likes of Pfizer and BioNTech was suggested any new vaccine would be able to modified fairly quickly. His rather candid comments have also seen oil prices slide back sharply, as an increasingly jittery market react with concern to the prospects of further restrictions and lower demand.

Moderna’s Stéphane Bancel also said that efficacy data indicating how the existing vaccines perform against the Omicron variant should become available within two weeks.

But he told the Financial Times it would take several months before an Omicron-specific vaccine could be produced at scale, and suggested there might be a case for giving more potent boosters to the elderly or people with compromised immune systems in the meantime.

The FT explains:

“[Moderna] and Pfizer cannot get a billion doses next week. The maths doesn’t work. But could we get the billion doses out by the summer? Sure,” said Bancel, who predicted Moderna could make a total of 2bn-3bn doses in 2022.

But he said it would be risky to shift Moderna’s entire production capacity to an Omicron-targeted jab at a time when other variants are still in circulation.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Anxiety over the Omicron variant is rippling through the financial markets again this morning, after the chief executive of drugmaker Moderna warned that existing Covid-19 vaccines are unlikely to be as effective against the Omicron variant as they have been against Delta.

Stéphane Bancel’s comments, to the Financial Times, have hit Asia-Pacific stocks, and the oil price, just a day after markets had stabilised after Friday’s tumble.

The FT says:

The chief executive of Moderna has predicted that existing vaccines will be much less effective at tackling Omicron than earlier strains of Covid-19 and warned it would take months before pharmaceutical companies can manufacture new variant-specific jabs at scale.

Stéphane Bancel said the high number of Omicron mutations on the spike protein, which the virus uses to infect human cells, and the rapid spread of the variant in South Africa, suggested the current crop of vaccines may need to be modified next year.

“There is no world, I think, where [the effectiveness] is the same level . . . we had with Delta,” Bancel told the Financial Times in an interview at the company’s headquarters in Cambridge, Massachusetts.

He added: “I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to . . . are like ‘this is not going to be good’.”

The Moderna chief executive’s comments come as other public health experts and politicians have tried to strike a more upbeat tone about the ability of existing vaccines to confer protection against Omicron.

Here’s the full story: Moderna chief predicts existing vaccines will struggle with Omicron.

The news has knocked risk-sensitive currencies, with the Australian dollar dropping to a one-year low.

Japan’s Nikkei stock market index sank by 1.6%, as Bancel’s comments worried investors.

European markets are heading for a lower open, with the FTSE 100 seen falling around 1%.

Yesterday, the World Health Organization said Omicron poses a “very high” global risk, and is likely to spread internationally.

Overnight, Hong Kong has widened a ban on entry for non-residents from several countries. Non-residents from Angola, Ethiopia, Nigeria and Zambia would not be allowed to enter as of November 30.

Non-residents who have been to Austria, Australia, Belgium, Canada, the Czech Republic, Denmark, Germany, Israel and Italy in the past 21 days would not be allowed to enter the city from December 2nd.

England’s mask mandate returns today, meaning people will be required by law to wear a face covering in certain places.

America’s top central banker, Jerome Powell, will testify to the Senate later today, where he’ll explain how the Omicron variant poses a downside risk to the US economy, and complicates the inflation picture.

The agenda

• 8.55am GMT: German unemployment report for November
• 10am GMT: Flash estimate of Eurozone inflation in November
• Noon GMT: India’s third-quarter GDP report
• 1.30pm GMT: Canada’s third-quarter GDP report
• 3pm GMT: US house price index for September
• 3pm GMT: US Federal Reserve chair Jerome Powell testifies to the Senate Banking committee