Wall Street broke new records as tech companies prepared to release third quarter results – Copyright AFP / File Lionel BONAVENTURE
Global equity markets rebounded on Tuesday after a fierce sell-off fueled by Omicron, but natural gas prices hit record highs and stoked worries about global inflation.
Markets in Asia, Europe and the United States took center stage, as investors recouped Monday’s losses over concerns over the rapidly spreading variant of the Omicron coronavirus.
Stocks and oil prices have climbed as bargain buyers have settled in, though investors remain fixated on the Omicron strain and work to contain it over Christmas and New Years.
Gas prices have, however, hit all-time highs amid winter demand concerns and latent geopolitical tensions between Russia’s main supplier and consuming countries, raising inflation alarms for investors.
– Festive volatility –
“Traders may be on vacation mode, but this is not moderating the markets, which continue to see a lot of volatility as the end of the year approaches,” Craig told AFP. Erlam, OANDA analyst.
“Of course Omicron and all the headlines that go with it play a huge role, not to mention the plethora of interest rate decisions last week and the political circus in Washington,” he added.
With many investors on the sidelines for the holidays, liquidity is low in the market, which can increase market fluctuations.
Sentiment was also shaken by the news that the benchmark price of Dutch TTF gas in Europe hit 175 euros per megawatt hour in the early afternoon, while prices in the UK jumped to 435 pence per therm .
“Inflation is already skyrocketing and growing concern for central banks and rising gas prices will only further exacerbate this move, which could put further pressure on households and businesses,” Erlam said.
Rising gas prices and the latest wave of Covid cases come just as central banks around the world begin to remove ultra-accommodative monetary policies put in place at the start of the pandemic to shield economies from the ravages of lockdowns.
Combined with the Omicron variant which is sweeping populations and forcing governments to re-impose anti-virus measures, the global economy faces a myriad of threats.
Reports that moderate Democratic Senator Joe Manchin might still be willing to discuss US President Joe Biden’s $ 1.75 trillion social spending bill – after he dealt a heavy blow to the White House on Sunday by defeating it – provided some support as the talks are likely to drag on.
Elsewhere on Tuesday, the Turkish lira extended the dollar’s gains after surging in response to measures announced by the country’s government to strengthen the besieged currency.
– Key figures around 2:30 p.m. GMT –
London – FTSE 100: Up 1.0% to 7,270.91 points
Paris – CAC 40: + 1.1% to 6,948.05
Frankfurt – DAX: + 1.2% to 15,423.05
EURO STOXX 50: + 1.5% to 4,166.68
New York – Dow: 0.9% to 35,241.79
Tokyo – Nikkei 225: Up 2.1% to 28,517.59 (close)
Hong Kong – Hang Seng Index: EN up 1.0% to 22,971.33 (close)
Shanghai – Composite: EN up 0.9% to 3,625.13 (closing)
Euro / dollar: up to $ 1.1283 from $ 1.1279 Monday night
Pound / dollar: At $ 1.3259 vs. $ 1.3207
Euro / pound: DROP to 85.11 pence against 85.40 pence
Dollar / yen: up to 113.84 from 113.61 yen
North Sea Brent: Up 2.1% to $ 73.03 per barrel
West Texas Intermediate: Up 2.5% to $ 70.29
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