Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Bulls take charge as Omicron concerns ease

EconomyDec 08, 2021 08:53
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: People wearing protective masks, amid the coronavirus disease (COVID-19) outbreak, are reflected on an electronic board displaying Japan's stock prices outside a brokerage in Tokyo, Japan, October 5, 2021. REUTERS/Kim Kyung-Hoon 2/2

By Herbert Lash and Marc Jones

NEW YORK/LONDON (Reuters) -Global equity markets and oil prices surged on Tuesday after a timely shot of Chinese stimulus helped spark a rally that was further fueled by views that the Omicron COVID-19 variant will not cause major economic damage.

The Nasdaq jumped 3% as technology shares bounced back, helping the FTSEurofirst 300 index of leading European companies post its first back-to-back run of more than 1% gains since February.

Tech stocks climbed 5.6% in Europe, while the S&P information technology sector rose 3.5%, driving almost half of the S&P 500's gains. Semiconductors advanced 5.0% and all 11 of the S&P sectors rose. Growth rose 2.7%, outpacing value's 1.3% gain.

Asia overnight cheered record bounces by some of China's beaten-down tech giants, including e-commerce giant Alibaba (NYSE:BABA) Group and other technology majors, including Inc and Baidu Inc (NASDAQ:BIDU).

Portfolio managers did not want to be left behind in an impressive rally, helping drive equities higher, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"Did the seasonal Santa Claus rally, which we typically have at some point in December, start yesterday?" he said. "There's certainly fear of missing out."

An easing of Omicron fears also emboldened investors to have a little more of a "risk-on" mentality, James said.

Preliminary evidence indicates that Omicron likely has a higher degree of transmissibility but is less severe, top U.S. infectious disease expert Anthony Fauci said on Tuesday.

MSCI's all-country world index advanced 2.1% in its biggest percentage gain since November 2020. The FTSEurofirst 300 in Europe closed up 2.42%.

On Wall Street, the Dow Jones Industrial Average rose 1.40%, the S&P 500 gained 2.07% and the Nasdaq Composite advanced 3.03%.

Easing Omicron worries and the Chinese stimulus lifted riskier currencies, with the Australian dollar leading the charge, gaining 1.0%.

The dollar index, which tracks the greenback versus a basket of six currencies, pulled back at the session's end, up 0.03% to 96.324. The euro fell 0.19% at $1.1263, while the yen edged up 0.05% at $113.52.

Expectations the Federal Reserve will accelerate the tapering of its bond-buying program when it meets next week in response to a tightening labor market also supported the dollar.

The yield on 10-year U.S. Treasury notes rose 4.4 basis points to 1.479%.

Investors believe the Fed will do more, and sooner, to fight inflation, said David Petrosinelli, senior trader at InspereX, referring to a flattening of the yield curve measuring the gap between yields on two- and 10-year Treasury notes.

"The front end is focused on the Fed tightening policy because they need to, and the back end is more recognition that this economy probably is going to slow down in the first quarter," he said.

The equity gains came after China's central bank injected its second shot of stimulus since July by cutting the amount of cash that banks must hold in reserve.

Uncertainty about its property sector remained, however, as embattled China Evergrande (HK:3333) teetered on the brink of a massive default. Evergrande failed to make payments on some U.S. dollar bonds at the end of a month-long grace period, sources familiar with the situation told Reuters on Tuesday.

Australia's S&P/ASX200 rose nearly 1% as its central bank left interest rates at a super-loose 0.1% and Japan's Nikkei advanced 1.9% as the yen dipped. (T)

Oil prices climbed more than 3% on easing concerns Omicron will reduce demand and as the prospect of an imminent rise in Iranian oil exports receded.

Brent crude rose $2.36 to settle at $75.44 a barrel. U.S. crude settled up $2.56 to $72.05 a barrel.

Gold prices inched higher as attention turned to U.S. inflation data due on Friday, which could influence the pace at which the Fed hikes interest rates.

U.S. gold futures settled up 0.3% at 1,784.70 an ounce.

Bitcoin rose 0.31% to $50,697.01.

Bulls take charge as Omicron concerns ease

Related Articles

Dollar steadies as traders reassess rate hike bets
Dollar steadies as traders reassess rate hike bets By Reuters - Jan 17, 2022

By Joice Alves LONDON (Reuters) - The dollar edged lower on Monday as traders took the view that Federal Reserve tightening moves were largely priced in, while the euro eased from...

Asia braces for China data, oil nears 2021 highs
Asia braces for China data, oil nears 2021 highs By Reuters - Jan 17, 2022

By Wayne Cole SYDNEY (Reuters) - Asian share markets got off to a cautious start on Monday as the U.S. earnings season loomed large and a slew of Chinese economic data were...

Top 5 Things to Watch in Markets in the Week Ahead
Top 5 Things to Watch in Markets in the Week Ahead By - Jan 16, 2022

By Noreen Burke -- Earnings season kicks into high gear in the coming week, with the financial sector particularly in focus. Earnings results will test growth stocks...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email