European stocks joined a global bounce on Monday, though the region’s main index still clawed back just a portion of ground lost last week to global shock over the omicron variant of the coronavirus that causes COVID-19.
The Stoxx Europe 600 index
SXXP,
rose 1.2% to 469.98, following Friday’s slump of 3.6%, the biggest one-day percentage fall since June 2020. For the week, the index fell 4.5%, the largest drop since the week ending March 13, 2020. Elsewhere, the German DAX
DAX,
rose 0.8%, the French CAC 40 index
PX1,
gained 1.4% and the FTSE 100 index
UKX,
was up 1.6%.
The euro
EURUSD,
fell 0.3% to $1.1270, while the pound
GBPUSD,
dropped 0.2% to $1.3307. Elsewhere, the 10-year German bund yield
TMBMKDE-10Y,
was up 3 basis points to -0.30% after tumbling 32 basis points on Friday.
Europe stocks were also getting a lift as U.S. equities
DJIA,
SPX,
staged a rebound. With data still in the early stages, investors were trying to come to grips with what the new variant will mean for the pandemic recovery, as cases popped up across Europe and countries tightened up restrictions.
Europe had already been struggling with a fourth wave of the virus well before South African health officials informed the world about a potentially more contagious strain on Friday. By Monday, investors were clinging to some hopes that the variant could be less severe in individuals based on what some health officials in South Africa were saying.
“The potential for a less deadly form of the virus does appear to provide some respite to the risk-off sentiment dominating Friday’s trade. However, the weeks ahead are fraught with danger for investors, with traders now likely to see any major updates associated with this new variant as a priority over most other economic data points,” said Joshua Mahony, senior market analyst at IG.
As for stocks on the rise, travel and airlines were still getting bid on Monday, with Ryanair
RYAAY,
RYA,
Wizz Air
WIZZ,
and Carnival
CCL,
up 6% each. Banks such as HSBC Holding, up 1.3%, and energy names — BP
BP,
BP,
and Royal Dutch Shell
RDSA,
RDS.A,
up more than 3% each — helped drive positive action.
Gains for the latter came as U.S. oil prices
CL00,
rose more than 4%, though after a rout three times that. Brent prices
BRN00,
rose just over 3%.
Elsewhere, fresh data showed Spain inflation surging 5.6% in November, the highest since September 1992, with German HICP inflation surging to 6% from 4.6% in October. Analysts at Capital Economics said the data should start to come down from here. Part of the inflation problem for Europe comes from higher electricity and natural gas prices that continue to climb in the region.
This post was originally published on Market Watch
