European shares extended gains on Monday as investors eyed key central bank meetings this week and despite a surge in cases of the coronavirus Omicron variant.
The pan-European Stoxx 600 was up 0.55%. Asian closed higher after US stocks surged on Friday, driven by US inflation data, which was well within market expectations.
Investor focus is on monetary policy decisions expected to be taken by the European Central Bank (ECB), the US Federal Reserve, the Bank of England, and the Bank of Japan this week. Analysts expect the ECB to halve the amount of assets it buys each month from April.
In the UK, beleaguered Prime Minister Boris Johnson warned of a “tidal wave” of Covid cases as a result of omicron. From this week, booster jabs will be offered to all adults in England as the Covid threat level was raised.
The news hit airline shares with easyJet and Wizz Air both lower.
“While market concerns about Omicron appear to be diminishing, the concerns of governments about the variant appear to be going in the other direction and increasing, with the UK government implementing a Plan B of new restrictions starting this week, as well as accelerating the roll out of its booster vaccination program,” said CMC Markets analyst Michael Hewson.
“Against these increasing concerns of a rising Omicron wave, in Europe there is the already present wave of Delta to deal with, which is still on current evidence much more deadly, while there are still no reported fatalities because of Omicron anywhere in the world, including South Africa, where it was first reported.”
In equity news, Vifor Pharma soared more than 20% after Australian biopharma giant CSL confirmed it was in talks to buy the Swiss drugmaker in a deal reportedly worth about $7.2bn.
Shares in Norwegian energy and aluminium company Norsk Hydro were up as it announced new improvement targets as well as new sustainability ambitions and plans to pay a bigger dividend for 2021 following a jump in earnings
UniCredit rose after the bank said it wanted to grow its domestic footprint and could consider tie-ups in Italy and beyond, but has no interest in the country’s biggest insurer Generali and its top shareholder Mediobanca.
Air France KLM gained after the flag carrier redeemed €500m euros from an earlier state loan issued to help it cope with the impact of the pandemic, and said it could also raise new equity.
