Paris, Dec 28 (AFP/APP):Stock markets mostly rose on Tuesday as investors appeared to ride a “Santa Claus rally” and optimism that the Omicron coronavirus variant will not derail the global economic recovery.
Covid-19 cases have surged across the world, prompting governments to impose new measures to limit contagion while the travel industry faced thousands of flight cancellations.
Experts caution against too much optimism around early indications that Omicron causes less severe disease than previous strains, pointing out that it is spreading so fast it could still overwhelm health systems.
But investors seem to be reassured about its effects on the economy.
The US Centers for Disease Control and Prevention helped sentiment on Monday as it cut the isolation period for asymptomatic Covid cases in half to five days.
“That recommendation will reduce some of the pressure of staffing shortages, which in turn is feeding into the market’s belief that the economic impact of the Omicron variant is going to be short-lived,” said Briefing.com analyst Patrick O’Hare.
On Wall Street, the S&P 500 continued to rise after two straight record days, while the Dow was up in midday trading. The tech-heavy Nasdaq, however, was down.
Frankfurt’s DAX index finished 0.8 percent higher while the Paris CAC 40 closed at a record, rising 0.6 percent to 7,181.11 points. London was closed for a holiday.
– Santa Claus rally? –
This week starts a historically strong seven-day post-Christmas stretch known on trading floors as the “Santa Claus rally”: a period of low trading volumes and light news flow that usually sees stocks drift higher.
Investors “feel that the current Omicron isn’t as worrisome as the previous variant and that life will return back to normality sooner than later,” AvaTrade chief market analyst Naeem Aslam told AFP.
“Hence we are likely to see this Santa rally going throughout this week,” he said.
The optimistic risk-on appetite carried over to Asia, with Tokyo leading the charge to close 1.4 percent higher.
“Investors were comfortably buying back shares after watching US rallies,” said Yoshihiro Okumura of Chibagin Asset Management.
“Although investors are concerned about Omicron, they are also expecting an economic recovery next year,” Okumura told AFP.
Shanghai recovered from early losses to end 0.4 percent higher while Hong Kong closed up 0.2 percent in a see-saw session as Macau casino stocks fell sharply after the gaming enclave reported its first Omicron case.
The euro was down against the dollar ahead of the single European currency’s 20th anniversary since it went into circulation on January 1.
– Key figures around 1645 GMT –
New York – Dow: UP 0.5 percent at 36,468.75 points
Frankfurt – DAX: UP 0.8 percent at 15,963.70 (close)
Paris – CAC 40: UP 0.6 percent at 7,181.11 (close)
Tokyo – Nikkei 225: UP 1.4 percent at 29,069.16 (close)
Hong Kong – Hang Seng Index: UP 0.2 percent at 23,280.56 (close)
Shanghai – Composite: UP 0.4 percent at 3,630.11 (close)
London – FTSE 100: FLAT at 7,372.10 points (Friday close)
Euro/dollar: DOWN at $1.1310 from $1.1329 late on Monday
Pound/dollar: DOWN at $1.3428 from $1.3440
Euro/pound: DOWN at 84.22 pence from 84.26 pence
Dollar/yen: DOWN at 114.72 yen from 114.88 yen
West Texas Intermediate: UP 0.8 percent at $76.17 per barrel
Brent North Sea crude: UP 0.9 percent at $78.89 per barrel
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