World shares stall, oil drops as virus issues linger By Reuters

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© Reuters. FILE PHOTO: A man looks at stock market monitors in Taipei Jan. 22, 2008. REUTERS / Nicky Loh

By Danilo Masoni and Kevin Buckland

MILAN / TOKYO (Reuters) – Global equities stabilized and oil prices plummeted Monday in quiet trading as Christmas flight cancellations rekindled concerns that the Omicron virus variant could slow the economy early in the new year.

U.S. airlines have canceled or postponed thousands of flights in the past three days due to COVID-19 staff shortages, while several cruise lines have had to cancel layovers following onboard outbreaks.

In Asia, China reported the highest daily increase in local COVID-19 cases in 21 months over the weekend as infections more than doubled in northwestern Xian, the country’s newest COVID hotspot.

France set another COVID-19 infection record on Friday, prompting the government to convene a special session on Monday that could trigger new restrictions on movement.

World stocks barely changed until 0946 GMT as preliminary gains in Europe were offset by previous weaknesses in Asian markets, though some investors were confident that a global rebound would pick up speed again next year.

“On the way into 2022 we will still have COVID uncertainties, but the good news is that according to WHO we could see the end of the pandemic towards the end of the year,” said Jawaid Afsar, retailer at Securequity.

He added that markets would also face other issues over the next year, ranging from inflationary pressures to monetary tightening to geopolitical risks.

The pan-European equity benchmark gained 0.2%, while it ended 0.4% lower and South Korea’s Kospi lost 0.4%.

Mainland stocks fell, with Shanghai’s benchmark declining 0.4% and a blue chip index falling less than 0.1%. It did so despite the spike in real estate stocks after China’s central bank promised to encourage healthy real estate market development.

Australia, Hong Kong and the UK are among the markets that are closed on Monday for bank holidays.

DOLLAR REACH

Trading on Wall Street was expected to resume later the day after a Friday holiday. US stocks closed at record highs Thursday amid signs that Omicron could cause milder levels of disease, despite the highly transmissible burden spurring case numbers up around the world.

E-mini futures pointed to a 0.1% gain when it reopened.

Safe-haven US Treasuries saw weak demand, with 10-year yields falling 1 basis point (bps) to 1.4807% and further pulling back from Thursday’s high of just over 1.5%. Germany’s 10-year yield, the benchmark for the euro zone, gained 2 basis points and reached a one-month high of -0.231%.

In the currency markets, the dollar moved a range despite a restrictive turn at the Federal Reserve that caused policy makers to rise three-quarter points over the next year.

The one, which measures the currency against six major competitors, rose 0.1% to 96.23, roughly halfway through the trading range of the past few weeks.

Among risk-sensitive currencies, the Australian dollar lost 0.2% and the British pound gained 0.2% while the euro lost 0.1%.

The Turkish lira lost 5.9% against the dollar amid ongoing monetary policy concerns after rising again last week on government-sponsored market intervention.

In the crude oil market, US West Texas Intermediate Futures fell 1.1% to $ 73.01 a barrel. The contract was not traded on Friday due to the US market holiday.

rose 0.1% to $ 76.20 a barrel after leveling off 0.92% on Friday.

Gold fell 0.1% to $ 1,805.6 an ounce as the rise in the dollar made gold more expensive for holders of other currencies.

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