Europe Spots “Omicron”, Capital Nomura Expects Economic Recovery to Slowdown
Some of the European countries have reported several cases of new Covid-19 omicron variant, while Capital Nomura expects the spread to slowdown economic recovery.
The new Covid-19 variant first found in South Africa last week is now spreading in European countries such as UK, Germany and Italy according to reports over the weekend as governments are forced to act promptly in tightening restrictions against the new strain now being called omicron.
Despite the warning from the World Health Organization (WHO) against any overreaction before the variant was thoroughly studied, many countries including Australia, Canada, the European Union, Japan, and the United States had raised their guard against omicron.
Stock markets reacted negatively last Friday to the report of this new variant. On Thanksgiving, Dow Jones dropped 905.04 or 2.53% to close at 34,899.34 points. Meanwhile, S&P 500 shedded 2.27% and Nasdaq plunged 2.23%.
Thailand’s SET Index closed at 1,610.61 points, decreased 37.85 points or 2.30%.
Kasikorn Securities (KS) expected the new wave of Covid-19 in Europe could pose negative sentiment, causing fluctuation in the short-term, especially to reopening stocks. However, the retreat could be an entry point for accumulation as the securities company expected the situation was not critical to the point of full lockdown, citing that the vaccine rollout could help against the new wave of Covid-19.
Capital Nomura Securities (CNS) estimated that the spread of omicron could impact the tourism industry and slow down Thailand’s economic recovery. The analyst recommended investors to keep an eye on the report of vaccine development against Covid-19 omicron variant and monitor the situation in each country to evaluate the contagious rate.
CNS expected a support level for SET Index next week at 1,560-1,580 points and a resistance level at 1,630 points, and advised to accumulate stocks in ICT, power generator and electronic parts sector for long term investment after the decline in the Thai stock market.