European shares rebound from Omicron-fuelled sell-off

Investors await clues on whether the Omicron variant would hamper recoveries

  A woman stands next to an electronic board displaying the Hang Seng Index Hong Kong. Photograph: Jerome Favre/EPA

A woman stands next to an electronic board displaying the Hang Seng Index Hong Kong. Photograph: Jerome Favre/EPA

 

European shares rebounded on Monday from their worst selloff in more than a year, as investors awaited clues on whether the Omicron variant of coronavirus would hamper economic recoveries and monetary tightening plans by central banks. The pan-European Stoxx 600 advanced 1 per cent earlier, after a 3.7 per cent slump on Friday, triggered by concerns around the newly discovered variant. A South African doctor who was one of the first to suspect a different coronavirus strain among patients said on Sunday that symptoms of the Omicron variant were so far mild and could be treated at home. All sectors were trading higher, with travel stocks leading gains as Airbus, Lufthansa and Ryanair rose between 0.7 per cent and 1.7 per cent after slumping the most on Friday on fears of fresh travel restrictions.

Oil stocks also lifted the benchmark, adding 1.8 per cent as crude prices recovered on speculation that OPEC+ may pause an output increase in response to the spread of Omicron.

Meanwhile, European Central Bank board member Isabel Schnabel said inflation peaked in November and it would be premature to tighten policy. BT Group jumped 7.7 per cenr on reports that Indian oil-to-telecom conglomerate Reliance was considering an offer for the UK telecom firm. Car parts group Faurecia dropped 5.6 per cent after trimming its full-year guidance, citing a drop in European automotive production.

Earlier Japanese shares tumbled on Monday with the Nikkei average sliding to its lowest level in 1.5 months, hit by worries about the damage that the Omicron coronavirus variant could inflict on the economy.

The Nikkei lost 1.63 per cent to 28,283.92, a low last seen on October 13th, after sliding 2.5 per cent on Friday. The broader Topix dropped 1.84 per cent to 1,948.48, falling below its 200-day moving average for the first time since August 2020. Sentiment deteriorated after Japanese prime minister Fumio Kishida said Japan will bar entry to foreign visitors from November 30th as it seeks to respond to the new Omicron variant. Travel-related sectors were the worst hit, with Tokyo Disney Resort operator Oriental Land Corp falling 4.8 per cent. - Reuters