BEIJING (AP) – European stocks and oil prices rebounded yesterday while Asian markets fell further after the coronavirus’s omicron variant was found in more countries and governments imposed travel controls.
London and Frankfurt opened higher. Shanghai, Tokyo and Hong Kong declined, though losses were smaller than Friday’s fall after reports the variant first spotted in South Africa appeared to spread around the globe.
On Wall Street, the future for the benchmark S&P 500 index was up 0.7 per cent. The future for the Dow Jones Industrial Average gained 0.5 per cent.
“Markets have rebounded this morning following reassuring noises over the weekend about the severity of the Omicron,” said Neil Shearing of Capital Economics in a report. “But we’re unlikely to have the full picture for several weeks.”
In early trading, the FTSE 100 in London rose 0.8 per cent to 7,100.22. The DAX in Frankfurt gained 0.8 per cent to 15,392.78 and the CAC 40 in Paris advanced one per cent to 3,808.48.
On Friday, the S&P 500 fell 2.3 per cent for its biggest daily loss since February. The Dow lost 2.5 per cent while the Nasdaq Composite retreated 2.2 per cent.
Investors sold banks, energy and airline stocks and shifted money into bonds and other safe haven assets.
In Asia, the Nikkei 225 fell 1.6 per cent to 28,283.92 after Japan announced it will bar entry by foreigners starting today.
The Shanghai Composite Index lost less than 0.1 per cent to 3,462.70 and the Hang Seng in Hong Kong sank 0.9 per cent to 23,852.24.
The Kospi in Seoul declined 0.9 per cent to 2,909.32 and Sydney’s S&P-ASX 200 retreated 0.5 per cent to 7,239.80. India’s Sensex gained 0.9 per cent to 57,599.03. New Zealand, Singapore and Bangkok fell while Jakarta advanced.
The World Health Organization called Omicron “highly transmissible”, but it was unclear whether it is more dangerous than earlier variants.
Governments imposed new travel controls, fuelling investor fears about possible setbacks in containing the pandemic that has killed more than five million people since the first cases in late 2019.
The new variant was found in Hong Kong, Belgium and Tel Aviv. The European Union, the United States and Britain imposed curbs on travel from Africa. Israel banned entry by foreigners.
Also yesterday, Japan’s government reported retail sales rose 1.1 per cent in October over the previous month. Vehicle sales fell 6.7 per cent.
The Omicron variant might complicate planning by central banks that are deciding when and how to withdraw stimulus that is boosting stock prices.
Investors were rattled last week when notes from the Federal Reserve’s October meeting showed officials said they were ready to consider raising interest rates sooner than planned in response to higher inflation. The Fed previously said its first rate hike might not come until late 2022.
In energy markets, benchmark US crude surged USD3.50 to USD71.65 per barrel in electronic trading on the New York Mercantile Exchange, rebounding from Friday’s USD10.24 plunge. Brent crude jumped USD3.37 to USD74.96 per barrel in London.
The dollar rose to JPY113.36 from Friday’s JPY113.19. The euro rose to USD1.1272 from USD1.1319.