PARIS: Stock markets rose on Tuesday as investors appeared to ride a "Santa Claus rally" and optimism that the Omicron coronavirus variant will not derail the global economic recovery.
Covid-19 cases have surged across the world, prompting governments to impose new measures to limit contagion while the travel industry faced thousands of flight cancellations.
Experts caution against too much optimism around early indications that Omicron causes less severe disease than previous strains, pointing out that it is spreading so fast it could still overwhelm health systems.
But investors seem to be reassured about its effects on the economy.
"Concerns regarding the Omicron variant appear to be fading, as the (US) Center for Disease Control and Prevention (CDC) cut the suggested time for isolation in half," Schwab analysts said in a note.
"The change from the CDC may bring some attention to the airline industry which has suffered cancellations as a result of staffing shortages brought about by the quarantine recommendations," they wrote.
On Wall Street, the S&P 500 opened higher after two straight record days while the Dow rose 0.6 percent and the tech-heavy Nasdaq gained 0.1 percent.
Frankfurt's DAX index was up 0.7 percent in afternoon trading while the Paris CAC 40 was 0.5 percent higher after hitting a new record earlier in the day. London was closed for a holiday.
Santa Claus rally?
This week starts a historically strong seven-day post-Christmas stretch known on trading floors as the "Santa Claus rally": a period of low trading volumes and light news flow that usually sees stocks drift higher.
The "true catalyst" for the positive mood on Wall Street is likely "pure momentum," said Briefing.com analyst Patrick O'Hare.
"That can be couched in other terms, like a 'fear of missing out on further gains' or a 'seasonality trade' as market participants buy into the Santa Claus rally phenomenon," O'Hare said.
The optimistic risk-on appetite carried over to Asia, with Tokyo leading the charge to close 1.4 percent higher.
"Investors were comfortably buying back shares after watching US rallies," said Yoshihiro Okumura of Chibagin Asset Management.
"Although investors are concerned about Omicron, they are also expecting an economic recovery next year," Okumura told AFP.
Shanghai recovered from early losses to end 0.4 percent higher while Hong Kong closed up 0.2 percent in a see-saw session as Macau casino stocks fell sharply after the gaming enclave reported its first Omicron case.
Asian shares rise, yen falls as traders shrug off Omicron fears
The euro, meanwhile, was down almost 0.2 percent against the dollar ahead of the single European currency's 20th anniversary since it went into circulation on January 1.
Key figures around 1445 GMT
New York - Dow: UP 0.6 percent at 36,520.00 points
Frankfurt - DAX: UP 0.7 percent at 15,938.78
Paris - CAC 40: UP 0.5 percent at 7,172.30
Tokyo - Nikkei 225: UP 1.4 percent at 29,069.16 (close)
Hong Kong - Hang Seng Index: UP 0.2 percent at 23,280.56 (close)
Shanghai - Composite: UP 0.4 percent at 3,630.11 (close)
London - FTSE 100: FLAT at 7,372.10 points (Friday close)
Euro/dollar: DOWN at $1.1305 from $1.1329 late on Monday
Pound/dollar: UP at $1.3445 from $1.3440
Euro/pound: DOWN at 84.08 pence from 84.26 pence
Dollar/yen: DOWN at 114.83 yen from 114.88 yen
West Texas Intermediate: UP 0.7 percent at $76.09 per barrel
Brent North Sea crude: UP 0.6 percent at $79.05 per barrel
Comments
Comments are closed.