LONDON: European stock markets slid Thursday with sentiment hit by the first Omicron case in the United States, but oil rallied before an OPEC output call.

Oil prices rose strongly on expectations OPEC and its allies will pause their modest monthly crude production increase, while the dollar was mixed on the eve of key US nonfarm payrolls data.

Nearing midday in the eurozone, Frankfurt and Paris shed 1.1 percent and 0.7 percent respectively after a mixed Asian session.

London stocks lost 0.6 percent in late morning deals, with drugmaker GlaxoSmithKline slipping 0.2 percent despite news that its Covid antibody treatment appeared to be effective against the new Omicron variant.

Wall Street suffered a late plunge on Wednesday following news that Omicron had arrived stateside.

"The overall tone remains gloomy," summarised IG analyst Chris Beauchamp.

"The discovery of US cases of the new variant show that the spread of this new enemy has already begun."

News that a patient had come down with the new variant sent shivers through US investors who fear authorities will be forced to reintroduce strict containment measures or even lockdowns, derailing the recovery in the world's top economy.

That comes on top of a widespread belief the Federal Reserve will end its vast bond-buying financial support programme quicker than expected and begin hiking interest rates next year to prevent inflation -- now at a three-decade high -- from running out of control.

Traders were already feeling uneasy in recent weeks on concerns about the sharp rise in prices around the world caused by supply chain snarls, a spike in energy costs and a labour shortage.

The announcement of Omicron -- and warnings that vaccines may not be as effective against it -- sent them over the edge on Friday.

Experts say it will take weeks to fully understand the true danger of Omicron, though the World Health Organization said vaccines would probably fend off the worst of the variant.

Eyes will be on the latest meeting of OPEC and other major oil suppliers later Thursday as they discuss their plan to raise output each month to help quell prices, with the likely impact of Omicron on demand likely to be on the agenda.

European stocks resume falls on Omicron warning

The grouping has already raised the possibility it will pause the increases, having been upset by a decision by the United States and other major consumers including China to release some of their own reserves.

Such a move would tighten global supplies and has therefore pushed prices higher.

Oil prices remain well below their levels from a week ago after tanking Friday on fears of demand fallout from Omicron.

"The arrival of the Omicron variant and the ensuing sell-off obviously increases the odds that OPEC+ will opt to hit the pause button," added Helima Croft, a managing director at RBC Capital Markets.

Key figures around 1050 GMT

London - FTSE 100: DOWN 0.6 percent at 7,127.72 points

Frankfurt - DAX: DOWN 1.1 percent at 15,305.68

Paris - CAC 40: DOWN 0.7 percent at 6,834.60

EURO STOXX 50: DOWN 1.2 percent at 4,129.49

Tokyo - Nikkei 225: DOWN 0.7 percent at 27,753.37 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 23,788.93 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,573.84 (close)

New York - Dow: DOWN 1.3 percent at 34,022.04 (close)

West Texas Intermediate: UP 2.0 percent to $66.87

Brent North Sea crude: UP 1.9 percent at $70.17

Euro/dollar: UP at $1.1330 from $1.1317 at 2125 GMT on Wednesday

Dollar/yen: UP at 113.03 yen from 112.78 yen

Pound/dollar: UP at $1.3315 from $1.3271

Euro/pound: DOWN at 85.09 pence from 85.27 pence