Equities recover from fierce sell-off; gas spikes to record peaks
World stock markets rebounded Tuesday from a fierce Omicron-fuelled selloff, but natural gas prices spiked to record peaks and fanned global inflation worries.
Both Asia and Europe stocks were on the front foot, as investors clawed back Monday’s losses that were sparked by concerns over the fast-spreading Omicron coronavirus variant.
Stocks and oil prices trod higher as bargain-buyers moved in, though investors remain fixated on Omicron strain and moves to contain it over Christmas and New Year.
Gas prices however jumped to all-time highs on winter demand concerns and simmering geopolitical tensions between key supplier Russia and consumer nations, ringing inflation alarm bells for investors.
– Festive volatility –
“Traders may be in holiday mode but this is having no dampening affect on the markets, which are continuing to see plenty of volatility as we near the end of the year,” OANDA analyst Craig Erlam told AFP.
“Naturally Omicron and all of the headlines that come with it is playing a huge role, not to mention last week’s plethora of interest rate decisions and the political circus in Washington.
“The lack of liquidity in the market at this time of year is undoubtedly contributing to the volatility.”
Sentiment was jarred by news that Europe’s reference Dutch TTF gas price hit 162.775 euros per megawatt hour in late morning deals, while UK prices leapt to 408.30 pence per therm.
Markets have been lashed since the emergence of Omicron as it spreads quickly through populations, forcing governments to impose anti-virus measures that are economically damaging.
The Netherlands imposed a lockdown over the holiday period and Germany has tightened restrictions notably affecting the unvaccinated, and media speculation persists over tougher UK curbs.
The latest wave of Covid cases comes just as central banks around the world begin to remove the ultra-loose monetary policies put in place at the start of the pandemic to protect economies from the ravages of lockdowns.
Reports that moderate Democratic Senator Joe Manchin could still be willing to discuss US President Joe Biden‘s $1.75 trillion social spending bill — having delivered a blow to the White House Sunday by rejecting it — provided a little support, with talks likely to drag.
Elsewhere Tuesday, the Turkish lira extended dollar gains after surging in response to measures announced by the nation’s government to bolster the beleaguered currency.
– Key figures around 1145 GMT –
London – FTSE 100: UP 0.9 percent at 7,264.37 points
Paris – CAC 40: UP 0.9 percent at 6,930.93
Frankfurt – DAX: UP 1.1 percent at 15,412.05
EURO STOXX 50: UP 1.3 percent at 4,159.86
Tokyo – Nikkei 225: UP 2.1 percent at 28,517.59 (close)
Hong Kong – Hang Seng Index: UP 1.0 percent at 22,971.33 (close)
Shanghai – Composite: UP 0.9 percent at 3,625.13 (close)
New York – Dow: DOWN 1.2 percent at 34,932.16 (close)
Euro/dollar: UP at $1.1282 from $1.1279 late on Monday
Pound/dollar: UP at $1.3248 from $1.3207
Euro/pound: DOWN at 85.14 pence from 85.40 pence
Dollar/yen: UP at 113.68 from 113.61 yen
Brent North Sea crude: UP 1.1 percent at $72.29 per barrel
West Texas Intermediate: UP 1.3 percent at $69.52