European stock markets surged to five-week highs after a rally on Wall Street
Wall Street stocks surged in thin post-Christmas trading overnight despite rising COVID-19 cases across the country. It looks like investors do not expect Omicron to impact the growth outlook substantially. Adding to an upbeat tone, Mastercard said holiday sales rose 8.5% this year, the fastest pace in 17 years. As such, the S&P 500 gained 1.4% to notch fresh record highs. The Dow Jones added 1% and the tech-heavy Nasdaq rose 1.4%. In individual stocks, Apple surged 2.3% despite the company having closed all of its 12 New York City stores, citing cases of the Omicron coronavirus variant surging across the country.
Asian equities were mixed in early trade on Tuesday, as investor optimism was somehow dampened by worries about the potential impact of the Omicron variant. However, the sentiment has improved eventually to send regional benchmarks into the positive territory. Hong Kong’s Hang Seng gained 0.24%, the Shanghai Composite added 0.4%, while the Kospi in South Korea advanced 0.69%. Markets were closed in Australia for Boxing Day.
Taking heart from a rally on Wall Street, European stock markets surged to five-week highs on Tuesday. Still, the persistent Omicron worries will likely cap further gains with France tightening curbs and COVID-19 cases surging in Spain and Britain. Of note, Spain’s coronavirus infection rate exceeded 1,000 cases per 100,000 people for the first time. The pan-European STOXX 600 rose 0.3% in early deals, with almost all sectors trading in positive territory.
Meanwhile, currencies continue to tread water in tight ranges, with the dollar trading marginally lower on Tuesday. The USD index sheds 0.05% during the European hours, still holding around the 96.00 figure in thin trading conditions. EURUSD stays above the 20-DMA, struggling around 1.1330, with the euro lacking upside momentum despite the retreating greenback. The upside potential remains limited in the near term.
