Financial markets fell sharply on Tuesday after the head of drugmaker Moderna said existing COVID-19 vaccines would be less effective against the new Omicron variant, but they recovered strongly after more reassuring comments from European officials.

European Medicines Agency (EMA) executive director Emer Cooke told the European Parliament that existing vaccines will continue to provide protection.

Andrea Ammon, chair of the European Centre for Disease prevention and Control (ECDC), said the cases of Omicron so far confirmed in 10 European Union countries were mild or without symptoms, although in younger age groups. 

Major European stock markets, spooked by fears that vaccine resistance might trigger restrictions that would choke off a nascent recovery, were down about 0.5 percent at around 1500 GMT, having fallen as much as 1.5 percent in early trade.

In New York, the Dow Jones Industrial Average and the S&P 500 respectively opened 0.2 percent and 0.3 percent lower.

"There is no world, I think, where (the effectiveness) is the same level . . . we had with Delta," Moderna CEO Stephane Bancel told the Financial Times.

"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 University of Oxford said there was no evidence that current vaccines would not prevent severe disease from Omicron, but that it was ready to rapidly update its shot, developed with AstraZeneca, if necessary.

(With input from agencies)