European markets positive despite omicron Covid variant fears

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LONDON — European stocks started the new trading week higher, despite extensive concerns over the newly discovered omicron Covid variant.

The pan-European Stoxx 600 climbed 1.1% by early afternoon, with travel and leisure stocks jumping 3.5% to lead gains, while health care stocks fell 0.2%. Almost all sectors and major bourses traded in positive territory, with stocks looking to rebound from Friday’s sell-off.

The World Health Organization labeled the new omicron strain a “variant of concern” on Friday.

While scientists continue to research the variant, omicron’s large number of mutations has raised alarm. Preliminary evidence suggests the strain has an increased risk of reinfection, according to the WHO.

The variant has been found in the U.K., Israel, Belgiumthe NetherlandsGermany, Italy, Australia and Hong Kong, but not yet in the U.S. Many countries, including the U.S., moved to restrict travel from southern Africa.

Vaccine makers have announced measures to investigate omicron with testing already underway. While it remains to be seen how omicron responds to current vaccines or whether new formulations are required, Moderna’s Chief Medical Officer Paul Burton said Sunday the vaccine maker could roll out a reformulated vaccine against the omicron variant early next year.

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On the data front, euro zone business climate and economic sentiment data eased in November as expected. The European Commission’s economic sentiment gauge fell to 117.5 points from 118.6 in October, while inflation expectations pulled back slightly too.

In terms of individual share price movement, cruise ship operator Carnival climbed 6.8%, beginning to bounce back from Friday’s plunge.

BT climbed 6.2% after a report suggested that Indian oil-to-telecom conglomerate Reliance is considering an offer for the British company.

At the bottom of the European blue chip index, French car parts group Faurecia fell 5.8% after cutting its full-year guidance.

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— CNBC’s Hannah Miao and Eustance Huang contributed reporting to this story.



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