By Anisha Sircar

(Reuters.) European shares rallied Monday, following a sharp selloff over the past year. The investors waited to see if Omicron’s coronavirus might hinder recovery efforts and monetary tightening.

Pan-European shares gained 1.0% to recover some of Friday’s slump of 3.7% triggered by fears about the new variant.

Although the strain was found in many countries around the world, the South African doctor who first suspected it was from South Africa said the symptoms are mild and can be treated at home.

Susannah Streeter is a senior analyst in investment and markets at. “This news has reassured investors but stocks, especially those in the travel industry, will remain volatile due to the disrupted routes and new restrictions and overall uncertainty.” Hargreaves Lansdown, LON:

Omicron-related deaths have not been confirmed. But, Omicron’s potential for immunity against vaccines was still being investigated, according to the World Health Organisation.

The STOXX 600 saw gains in travel stocks with WizzAir, Lufthansa and TUI Group leading the way. British Airways-owner IAG (LON 🙂 also rose more than 3% on Friday, as a result of double-digit drops on Friday, a reflection of fears over new restrictions on travel.

As a result, financial stocks rose 1.7% while oil stocks rose 1.9%. This was due to speculation that OPEC+ might halt an increase in output as a response to Omicron. [O/R]

Isabel Schnabel (European Central Bank member) reiterated the bank’s monetary policy stance. She stated that November was the peak of inflation and suggested it wouldn’t be premature for them to tighten their policy.

Although the STOXX 600 saw record-breaking November numbers, it is now on track to lose about 2% per month. Strong earnings and lessening fears of tighter monetary policy outweighed concerns over the new European variant and the fresh restrictions.

BT Group (LON – 9.0%) jumped on news that Reliance in India, an Indian oil-to telecom conglomerate, was looking into a bid for UK’s telecom provider.

Vestas gained 1.2% following the announcement that almost all its IT systems were back online after an attack on ransomware was reported by the largest wind turbine manufacturer in November 19th.

Faurecia’s 6.3% decline in full-year guidance prompted by a fall in European automobile production, led to auto stocks being weighed down.