European stocks climbed for the third day on Thursday, as global markets continued their recovery from a bout of jitters over the Omicron coronavirus variant that shook investor sentiment last month.
The Stoxx Europe 600 index edged 0.3 per cent higher, with bourses in London, Frankfurt and Paris also advancing. The gains followed a 0.8 per cent rise on Thursday for MSCI’s broad Asia-Pacific index and a 1 per cent jump overnight for Wall Street’s S&P 500. Futures tracking the S&P 500 were little changed early in Chicago trading on Thursday.
Markets appeared in November to be poised to end 2021 on a dour note as concerns swirled over the effects of the new, highly contagious coronavirus strain on the global economy.
While several countries have tightened restrictions to slow the spread of the virus, “market participants already seem to have made up their minds that the threat of the quick advancing Omicron variant is manageable, for now,” said Bas van Geffen, strategist at Rabobank.
That view has been supported by data from South Africa, Denmark and the UK showing that a lower share of people infected with the Omicron variant are likely to require hospital treatment compared with cases of the Delta strain.
In Asia, China’s CSI 300 index rose 0.7 per cent on Thursday even after the country locked down 13m people in the central city of Xi’an in an attempt to slow the virus ahead of the 2022 Winter Olympics.
Global markets have also been supported by ultra-accommodative financial conditions, which have remained easy despite the US Federal Reserve and several other central banks this month adopting a more aggressive stance to tackling the elevated inflation that has swept across global economies.
Still, investors expect a potentially bumpy ride over the next week as holiday-thinned trading conditions could exacerbate any volatility caused by news on the virus.
In the fixed income market, the benchmark 10-year US Treasury note yield remained steady at 1.46 per cent and the German equivalent was also little changed at minus 0.28 per cent. The dollar barely budged against a basket of half a dozen global currencies.