New York – US and European stocks as well as oil prices rebounded on Monday from last week’s slump that was sparked by fears over a new variant of Covid-19.
Major Wall Street indices notched solid gains, with the broad-based S&P 500 climbing 1.3 percent. All three major US indices lost more than two percent on Friday amid concerns about emergence of the Omicron variant.
“The consensus is that Friday, the market probably overdid” the losses, said Art Hogan, chief strategist at National Securities.
“We have seen that new variant and new waves of Covid infection seem to have a diminishing economic impact because of the level of vaccinations and boosters.”
Frankfurt, London and Paris equities all advanced as well, after tumbling on Friday by around four percent on worries about a major hit to the global economy from the new coronavirus mutation. However, they gave up much of their gains as the day wore on.
ALSO READ | Stocks, oil plummet as new virus variant sparks panic
“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.
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.
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.
Major vaccine makers have said they already have started working on an Omicron-specific shot if the current jabs prove to be less effective against 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.
Among individual companies, Twitter dropped 2.3 percent as co-founder Jack Dorsey stepped down as chief executive.
Twitter’s chief technical officer Parag Agrawal will replace Dorsey in the top post, the company said, while the departing co-founder will remain a member of the board until his term expires at the 2022 meeting of stockholders.
– Key figures around 2040 GMT –
New York – Dow: UP 0.7 percent at 35,135.94 (close)
New York – S&P 500: UP 1.3 percent at 4,655.27 (close)
New York – Nasdaq: UP 1.9 percent at 15,782.83 (close)
London – FTSE 100: UP 0.9 percent at 7,109.95 (close)
Frankfurt – DAX: UP 0.2 percent at 15,280.86 (close)
Paris – CAC 40: UP 0.5 percent at 6,776.25 (close)
EURO STOXX 50: UP 0.5 percent at 4,109.51 (close)
Tokyo – Nikkei 225: DOWN 1.6 percent at 28,283.92 (close)
Hong Kong – Hang Seng Index: DOWN 1.0 percent at 23,852.24 (close)
Shanghai – Composite: FLAT at 3,562.70 (close)
West Texas Intermediate: UP 2.6 percent to $69.95
Brent North Sea crude: UP 1.0 percent at $73.44 per barrel
Dollar/yen: UP at 113.58 yen from 113.38 yen at 2200 GMT on Friday
Pound/dollar: DOWN at $1.3310 from $1.3337
Euro/dollar: DOWN at $1.1291 from $1.1317
Euro/pound: DOWN at 84.80 pence from 84.85 pence
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Source: AFP
Picture: Getty Images
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