Stocks, oil bounce back from Omicron

4.Stocks, oil bounce back from Omicron rout
People look at an electronic quotation board displaying the Nikkei 225 index of the Tokyo Stock Exchange in Tokyo on November 26, 2021. (Photo: AFP)
LONDON — US and European stocks as well as oil prices rebounded on Monday from a pre-weekend slump that was sparked by fears over a new variant of COVID-19.اضافة اعلان

Frankfurt, London and Paris equities all advanced, having tumbled on Friday by around four percent on worries of a major hit to the global economy. However, they gave up much of their gains as the day wore on.
On Wall Street, all three major indices moved higher, having lost more than two percent on Friday.

"The panic has passed for now," OANDA analyst Craig Erlam told AFP.
"There were no overly concerning developments over the weekend and so investors are testing the water again — but sentiment will remain fragile."
Oil also rallied, with WTI, the US benchmark crude contract, gaining more than six percent at one point, as investors reassessed Omicron's threat to energy demand.

WTI and international benchmark Brent shed more than 10 percent in value on Friday in their worst day since the US contract briefly fell into negative territory at the outset of the pandemic. analyst Patrick O'Hare said investors' "positive disposition is predicated partly on an embrace of the buy-the-dip trade and partly on the burgeoning hope that Omicron can be corralled with current vaccines, current treatments, and/or new vaccine formulations that can be ready relatively soon".

Asian bourses, however, fell further on lingering uncertainty over the new virus strain.

The new Covid variant Omicron is highly transmissible and requires "urgent action," G7 health ministers said on Monday.

'Anxiety attack'

"The anxiety attack on financial markets shows signs of alleviating, as investors pause for breath and spot signs of optimism while scientists race to establish the severity of the new variant," said Hargreaves Lansdown analyst Susannah Streeter.

Equities around the world went into freefall on Friday on news of the heavily mutated variant, which some fear could evade vaccines, as it forced several governments to throw up flight bans from southern Africa where it was discovered and introduce fresh containment measures.

Investor nerves were soothed somewhat after a South African doctor, who raised the alarm over Omicron, said over the weekend that dozens of her patients suspected of having the new variant had only shown mild symptoms and recovered fully without hospitalization.

"There are reports from doctors in South Africa that Omicron infections don't seem more severe and the World Health Organization’s appeal for caution also appears to have calmed some nerves," added Streeter.

'Very high' risk

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

The Covid variant has compounded an already jittery mood on trading floors caused by surging inflation and central banks starting to roll back their ultra-loose monetary policies to prevent prices from running out of control.

Shares in Twitter popped 10 percent higher on speculation that Twitter CEO Jack Dorsey was stepping down, prompting trading to be halted temporarily. The shares remained in positive territory after the news was confirmed although they gave up much of their gains as the morning wore on.

"He has previously been accused of being a part-time CEO, he also runs Square, which helps explain today’s share price reaction," analyst Michael Hewson at CMC Markets said of Dorsey.

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