European Stocks Higher; Travel Stocks Gain as Omicron Risks Reassessed -Breaking
Investing.com – European stock markets traded higher Monday, only partially unwinding Friday’s hefty losses, with travel stocks benefiting as investors reassess the potential economic damage the newly discovered omicron Covid variant might cause.
The market was frightened last week by fears that this variant would resist vaccinations, and may even cause economic collapse. However, South African health experts have indicated that the symptoms from the new variant have been mild so far, while drugmaker Moderna (NASDAQ:) Sunday indicated that it may roll out a new vaccine in the first half of next year.
At 4:10 AM ET (0910 GMT), the in Germany traded 0.6% higher, the in France also rose 0.9% and the U.K.’s climbed 0.9%. These indices declined by around 4 percent on Friday.
According to the World Health Organisation, there is a high risk of international spread of this omicron variant. Covid-19 surges in certain areas could lead to “severe consequences”.
There have been new cases in several countries including Australia, Denmark, Denmark, and the Netherlands. This has prompted countries to put more restrictions on travel as they try to become isolated.
IAG (LON:) stock rose 2.1%, Lufthansa (DE:) stock climbed 1.7%, while Tui (DE:) stock rose 1.5% as the airline and travel sector rebounded from last week’s rout. Eni stock rose 2.4% while Eni stock rose 2.7%. Royal Dutch Shell stock rose 3.1%. This was due to the rise in crude oil prices.
Traders are now reassessing the risks to global crude demand from the new omicron variant ahead of this week’s meeting of top producers to decide production levels moving into the new year.
The Organization of Petroleum Exporting Countries with its allies (a group called OPEC+), meets Thursday to discuss the threats from the new variant, as well as the decision of a U.S. coalition of major consumer to boost global supplies from emergency reserves.
The consensus was that the group would continue to add 400,000 barrels per hour in January to meet demand recovery. But speculation is growing that OPEC+ will halt production increases this week.
The futures closed at $71.69/barrel by 4:10 AM ET. After dropping $9.50 last Friday, the price was 5.2% higher.
Economic news: Inflation in Spain rose 5.6% in November due to increases in fuel and food prices. Later in the session will be the German equivalent data. It is expected that it will also rise to the 5% mark, increasing pressure on European Central Bank policymakers before their December 16th meeting.
The price also rose 0.7% to $1.800.40/oz while it was 0.3% less at 1.1279.
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