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LONDON: Global stock markets rallied Tuesday on fading fears over dangers arising from the new Omicron Covid variant.

London stocks won 1.2 percent in late morning deals, while Frankfurt and Paris fizzed more than two percent higher at midday in the eurozone.

The dollar trod higher, while oil extended gains on dimming energy demand concerns.

Asian equities climbed despite renewed worries over potential debt defaults in China's troubled property sector.

"Markets flushed out at the first sign of Omicron, but now are more confident it won't be as bad as first feared," said Markets.com analyst Neil Wilson.

"Risk appetite is improving as evidence incrementally supports the case that the Omicron variant will be less damaging to the economy than was supposed at the end of November."

World stocks and oil had tanked on November 26 when news of the new variant first flashed across traders' screens.

After a rollercoaster ride since then, investors are now optimistic over the outlook in the run-up to Christmas.

"European markets are continuing their upward trajectory, with traders feeling increasingly confidence that the Omicron variant will not ruin Christmas," added IG analyst Joshua Mahony.

Omicron has been detected across the globe but no deaths have yet been reported.

Authorities worldwide are racing to determine how contagious it is and how effective existing vaccines are.

Top US pandemic adviser Anthony Fauci said over the weekend that, while more information was needed, preliminary data on the variant's severity was "a bit encouraging".

Sentiment was also buoyed Tuesday by moves from China's central bank to limit the economic fallout from debt crises in its troubled property sector.

Hong Kong stocks jumped 2.7 percent and Tokyo won 1.9 percent, but Shanghai was only marginally higher.

Asia markets up as Omicron fears ease

Reports meanwhile surfaced Tuesday that Evergrande was planning what could become China's biggest debt restructuring, wrapping in all its offshore obligations as it faced default on a key payment.

Its struggles have fanned concerns about China's property sector, which forms a substantial part of the world's second-biggest economy.

Another major property player, Sunshine 100 China Holdings, also said it had missed a repayment deadline.

In response to the crisis, China's central bank said Monday it would cut the reserve requirement ratio by 0.5 percentage points for most banks, effective December 15.

The move reduces the amount of cash the banks must hold in reserve, which will allow 1.2 trillion yuan ($188.4 billion) to be injected into the economy over the long term, the central bank said in a statement.

Key figures around 1100 GMT

London - FTSE 100: UP 1.2 percent at 7,317.25 points

Frankfurt - DAX: UP 2.1 percent at 15,704.59

Paris - CAC 40: UP 2.2 percent at 7,013.71

EURO STOXX 50: UP 2.5 percent at 4,239.13

Tokyo - Nikkei 225: UP 1.89 percent at 28,455.60 (close)

Hong Kong - Hang Seng Index: UP 2.7 percent at 23,983.66 (close)

Shanghai - Composite: UP 0.2 percent at 3,595.09 (close)

New York - Dow: UP 1.9 percent at 35,227.03 (close)

Brent North Sea crude: UP 2.5 percent at $74.93

West Texas Intermediate: UP 2.9 percent to $71.52

Euro/dollar: DOWN at $1.1276 from $1.1285 at 2200 GMT on Monday

Dollar/yen: UP at 113.66 yen from 113.48 yen

Pound/dollar: DOWN at $1.3263 from $1.3264

Euro/pound: DOWN at 85.01 pence from 85.08 pence

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