Stocks and oil prices rebound after Omicron rout

Stock markets and oil fell last week over fears over the Omicron variant of the coronavirus. – Copyright AFP / Apu GOMES file

U.S. and European stocks as well as oil prices rebounded on Monday after a pre-weekend drop triggered by fears of a new variant of Covid-19.

Shares of Frankfurt, London and Paris rose, after falling around 4% on Friday amid fears of a blow to the global economy.

On Wall Street, the three major indices rose more than a percentage point at the opening bell, after losing more than 2% on Friday.

“The panic is over for the moment,” Craig Erlam, analyst at OANDA, told AFP.

“There weren’t any too worrying developments over the weekend so investors are testing the water again – but sentiment will remain fragile.”

Oil also rallied, with WTI, the benchmark US crude contract, gaining more than 6%, as investors mulled over Omicron’s threat to energy demand.

WTI and international benchmark Brent lost more than 10% in value on Friday in their worst day since the US contract briefly fell into negative territory at the start of the pandemic.

Briefing.com analyst Patrick O’Hare said that “the positive investor disposition is based in part on the adoption of bearish buy trade and in part on the emerging hope that Omicron may be combined with current vaccines, current treatments and / or new vaccine formulations which may be ready fairly quickly.

Asian stock markets, however, fell further amid continued uncertainty over the new strain of the virus.

G7 health ministers were due to hold an emergency meeting on Monday on the new strain, as experts rush to understand what Omicron means for the fight against the pandemic.

– ‘Anxiety attack’ –

“The anxiety crisis in financial markets shows signs of abating, as investors pause to catch their breath and spot signs of optimism as scientists rush to establish the seriousness of the new variant.” said Susannah Streeter, analyst at Hargreaves Lansdown.

Shares around the world plummeted on Friday on news of the heavily mutated variant, which some fear could escape vaccines, as it forced several governments to ban flights from southern Africa where it was was discovered and to introduce new containment measures.

Investors’ nerves were eased somewhat after a South African doctor, who sounded the alarm bells about Omicron, said over the weekend that dozens of his patients suspected of having the news variant had only mild symptoms and made a full recovery without hospitalization.

US pharmaceutical company Moderna said on Friday it would develop a recall against Omicron.

“Amid the catastrophe that set in when doors were closed on travel routes from Africa and increased restrictions were imposed, there are glimmers of hope,” added Streeter.

“There are reports from doctors in South Africa that Omicron infections do not appear to be more serious and the World Health Organization’s call for caution also appears to have calmed some nerves.”

– “Very high” risk –

However, the WHO also warned on Monday that Omicron posed a “very high” risk globally, despite uncertainties about the danger and contagion levels of the new strain.

The Covid variant has worsened an already choppy mood in trading rooms caused by soaring inflation and central banks starting to reverse their ultra-accommodative monetary policies to keep prices from spiraling out of control.

– Key figures around 2:30 p.m. GMT –

London – FTSE 100: Up 1.6% to 7,158.92 points

Frankfurt – DAX: Up 0.9% to 15,395.56

Paris – CAC 40: + 1.4% to 6,837.05

EURO STOXX 50: Up 1.4% to 4,147.41

New York – Dow: + 1.1% to 35,293.59

Tokyo – Nikkei 225: DOWN 1.6% to 28,283.92 (close)

Hong Kong – Hang Seng Index: DOWN 1.0% to 23,852.24 (closing)

Shanghai – Composite: FLAT at 3,562.70 (closing)

West Texas Intermediate: Up 6.7% to $ 72.74

Brut Brent from the North Sea: up 5.6% to $ 76.77

Dollar / yen: UP to 113.84 yen from 113.46 yen at 22:00 GMT on Friday

Pound / dollar: DOWN to $ 1.3311 from $ 1.3337

Euro / dollar: DOWN to $ 1.1269 from $ 1.1317

Euro / pound: DROP to 84.66 pence against 84.85 pence

strawberries-rl / lth


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Felix J. Dixon