European and Asian stocks rise after Omicron, Powell’s remarks lead to collapse – .

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European and Asian stocks rise after Omicron, Powell’s remarks lead to collapse – .


European and Asian stocks rose and oil prices rebounded on Wednesday after a punitive session in which the economic impact of the Omicron coronavirus variant and hawkish comments from the chairman of the US Federal Reserve weighed on markets global.

The European Stoxx 600 index rose 0.7% at the start of trading, after closing down 0.9% in the previous session. The UK’s FTSE 100 stock index rose 1%, after closing 0.7% lower on Tuesday. In Asian markets, Hong Kong’s Hang Seng index rose 0.8 percent while Japan’s Topix index rose 0.4 percent.

Futures following the Wall Street S&P 500 index rose almost 1%. Those following the more tech-focused Nasdaq 100 Index rose 1.3%.

The rebound came after the markets fell on Tuesday, after the chief executive of vaccine maker Moderna used an interview with the Financial Times to predict that existing jabs would be much less effective in tackling Omicron than earlier strains of coronavirus.

The falls in equities were compounded when Fed Chairman Jay Powell signaled he would back faster monetary tightening from the US central bank to tackle soaring inflation, despite the economic threat posed by the new variant.

The S&P 500 closed nearly 2% lower, while the tech-focused Nasdaq fell 1.6%. Powell’s comments also pushed up yields on shorter-dated U.S. government bonds, which track interest rate expectations. Yields move inversely with bond prices.

Luca Paolini, chief strategist at Pictet Asset Management, said the emergence of Omicron was likely a trigger for asset managers to take profits after the S&P and Stoxx hit record highs earlier this month .

“We are not where we were in April 2020,” he said. “We know a lot more about this virus now and society is better prepared to deal with it. “It was an excuse for those who made a lot of money over the year to secure a profit. “

The yield on the benchmark 10-year US Treasury bill rose about 0.03 percentage point to 1.47 percent on Wednesday’s European morning.

Analysts still warn that Omicron could further disrupt global growth, just as many economies appeared to be recovering from the impact of the Delta variant.

“The emergence of the Omicron variant of the coronavirus poses new risks to global economic growth and the outlook for inflation,” said Madhavi Bokil, senior vice president of credit strategy and research at Moody’s.

Bokil added that while information on Omicron and political backlash has yet to change the rating agency’s growth forecast, travel restrictions “will likely increase over the next few weeks” as governments attempt to slow the spread of the variant.

Oil prices have also recovered from the sharp drops of the previous session. Brent crude, the international benchmark, rose 3.9% to $ 71.94 a barrel after falling nearly 4% on Tuesday. West Texas Intermediate, the U.S. marker, rose 3.7% on the day to $ 68.64, as investor attention shifted to the Opec + meeting later this week, when the group will decide whether to stop plans to increase supply.

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