European stocks advance on Omicron hope, oil rebounds

TOKYO: Pedestrians walk past an electronic quotation board displaying share prices of the Tokyo Stock Exchange in Tokyo. – AFP

LONDON: European equities advanced yesterday on hopes that the Omicron coronavirus variant might not be as damaging as initially feared, traders said. Oil rebounded after crude giant Saudi Aramco lifted the prices it charges Asian and US customers, in a sign of confidence in the COVID-sapped energy demand outlook. London equities gained 0.8 percent in late morning deals, despite this week’s reintroduction of tighter UK air travel curbs due to Omicron. Frankfurt won 0.3 percent and Paris added 0.7 percent in afternoon eurozone trade.

Riding Omicron hopes
“The (UK) travel industry may have been buffeted by yet another chill wind of more testing requirements, but airlines and hotel groups are riding higher amid hopes the new Omicron variant may not provoke more serious illness,” said Hargreaves Lansdown analyst Susannah Streeter. Global stocks had sunk Friday on weak US payrolls data — and heightened Covid concerns that continue to linger.

Asia faced a mixed performance yesterday, but was also roiled by struggling Chinese tech firms. “Markets remain beset by uncertainty as the spread of the Omicron variant threatens to derail the general economic recovery,” said Richard Hunter, head of markets at Interactive Investor. The Omicron variant has been detected across the globe but no deaths have yet been reported, with authorities worldwide racing to determine how contagious it is and how effective existing vaccines are. Top US pandemic advisor Anthony Fauci said Sunday that while more information was needed, preliminary data on the severity of the Omicron variant are “a bit encouraging.”

Tech slumps
Hong Kong stocks slid yesterday as last week’s news that Chinese ride-hailing giant Didi Chuxing would start the process of delisting from the New York Stock Exchange sent shares in tech firms tumbling. The move comes in the wake of a sweeping Chinese regulatory crackdown over the past year that has clipped the wings of major internet firms wielding huge influence on consumers’ lives — including Alibaba and Tencent.

Shares on the Hang Seng Tech index, which represents the 30 largest tech companies in the southern Chinese city, slumped sharply yesterday. Piling on the woes in Hong Kong was continued uncertainty over the future of the Chinese property market, after developer Evergrande warned that in light of its current liquidity situation, there was “no guarantee that the Group will have sufficient funds to continue to perform its financial obligations”. The property giant’s shares sunk by up to 20 percent yesterday on the news, Bloomberg reported. Bitcoin continued to struggle yesterday after a weekend collapse as investors fled risky assets. – AFP

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