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European Shares Seen Up As Omicron Concerns Ease

stockmarkets jan04 06dec21 lt

European stocks may open higher on Monday as concerns about the new coronavirus variant Omicron ease.

Early indications of the severity of the Omicron Covid-19 variant are "a bit encouraging," top U.S. pandemic advisor Anthony Fauci said Sunday, adding that it was too early to draw definitive conclusions and more information was still needed.

South Africa reported that Omicron is not leading to higher hospitalization rates despite a jump in active cases.

Asian markets traded mixed, with Hong Kong's Hang Seng index falling more than 1 percent after China's struggling property giant Evergrande warned it risked defaulting on a large financial obligation and sought help from its provincial government.

Having made three 11th-hour coupon payments in the past two months, the company is facing the end of a 30-day grace period today for a $82.5 million payment.

Kaisa Group Holdings is also facing a potential default, while Sunshine 100 China Holdings Ltd. has missed payment on $179 million of debt and interest payments due Sunday.

Meanwhile, China will cut banks' reserve requirement ratios (RRR) "in a timely way", state media on Friday quoted Premier Li Keqiang as saying as the economy faces multiple risks heading into next year.

The dollar index held steady as a mixed U.S. jobs report did little to shake market expectations of a more aggressive tightening by the Federal Reserve.

Gold traded flat, while oil prices rose over 2 percent after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States.

It's a busy week ahead on the economic calendar, with investors awaiting U.S. reports on consumer prices, trade balance and consumer sentiment for clues to the nature of economic recovery.

Chinese trade data, including exports, imports, and the trade balance, will be released on Wednesday while inflation, data, including the consumer price index and producer price index, will follow a day later.

European Central Bank President Christine Lagarde will speak at a conference on Wednesday, and the Eurozone GDP will be released the day before.

U.S. stocks ended on a downbeat note Friday as bond yields fell at a pace not seen since some of the worst days of the pandemic last year on data showing that U.S. job growth slowed considerably in November.

Non-farm payroll employment rose by 210,000 jobs in November while economists had expected employment to spike by 550,000 jobs.

However, a separate report showed an unexpected acceleration in the pace of growth in U.S. service sector activity in the month.

The tech-heavy Nasdaq Composite tumbled as much as 1.9 percent to hit its lowest closing level in well over a month, while the Dow edged down 0.2 percent and the S&P 500 eased 0.8 percent.

European stocks closed lower on Friday as U.S. jobs data disappointed and the World Health Organization said that the Omicron variant was detected in 38 countries.

The pan European Stoxx 600 declined 0.6 percent. The German DAX dropped 0.6 percent, France's CAC 40 index shed 0.4 percent and the U.K.'s FTSE 100 finished marginally lower.

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