European stock markets push higher as Omicron strain concerns ease
European stock markets pushed higher on Friday, in what has been a rollercoaster week, amid easing concerns surrounding the Omicron coronavirus variant and its impact on the global economy recovery.
It comes as investors have been trying to weigh up the effects of the new variant this week, which has been reported to be more transmissible than the Delta strain, and that vaccines may be less effective against it.
However, the World Health Organisation (WHO) said on Thursday that the strain may be contagious but less deadly, with early indications in most cases being mild.
Elsewhere, the UK saw a strong recovery in service sector activity in November, boosted by a steep rise in exports and new business growth.
New business intake accelerated for the second month running last month, and was the strongest since June.
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Across the pond, S&P 500 futures (ES=F) were trading 0.1% higher, Dow futures (YM=F) likewise rose 0.1%, and Nasdaq futures (NQ=F) were 0.2% higher a few hours before the opening bell in New York.
Traders will have their eyes on US jobs data later on Friday. Economists are expecting 550,000 more jobs to have been added to the economy.
The unemployment rate is also expected to fall further to 4.5%. Wage growth will also be watched closely, with evidence from retailers and some other big US employers that they are having to pay up for staff.
“Today’s main event is the November payrolls report particularly given Powell’s surprise hawkish tilt earlier this week, which places a much greater expectation of an acceleration to the tapering program when the Fed meets in less than two weeks’ time,” Michael Hewson of CMC Markets said.
“The October payrolls report helped to reaffirm the Federal Reserve’s decision a few days before to set the ball rolling on tapering its $120bn (£90.4bn) a month asset purchase program.”
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Stocks were mostly higher in Asia after a broad rally on Wall Street as investors kept an eye on the spread of the new variant and government measures.
In Japan, the Nikkei (^N225) rose 1% while the Hang Seng (^HSI) dipped 0.1% in Hong Kong and the Shanghai Composite (000001.SS) was 0.9% higher.
The latest Caixin PMI survey of the services sector in China showed a softening in growth last month, with the headline business activity index falling from 53.8 in October to 52.1 in November.
Despite the slight slowdown, this marked the third month of expansion, with higher labour, raw material, and energy costs driving a sharper rise in firms’ input costs to a six-month high.
Elsewhere, oil prices climbed higher, extending yesterday’s gains after an earlier sell-off, after the OPEC oil cartel and its allies (OPEC+), stuck to plans to pump 400,000 more barrels of oil per day from January.
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