European stocks had maintained gains by midday on Tuesday after the previous session’s sell-off as investors went bargain hunting, despite ongoing concerns over the Omicron Covid variant.
The pan-European Stoxx 600 index was up 1.1%, France’s CAC 40 was 1% higher and Germany’s DAX was ahead 1.2%. With some market traders already decamping for their Christmas break volumes are expected to get thinner as liquidity declines.
US markets fell sharply overnight after Democrat senator Joe Manchin refused to support President Biden’s $1.9trln build back better infrastructure bill, raising fears that US GDP could be substantially lower in 2022 as major building projects faced being postponed.
In the UK, the FTSE 100 index rose as public sector borrowing fell in November after spending on the pandemic eased and the government’s furlough scheme came to an end, but was still the second-highest figure for the month since records began in 1993.
“While concerns around Omicron remains very real the prospect of new restrictions being implemented this side of Christmas has receded somewhat, after the UK cabinet decided to wait for more data on hospitalisations and deaths,” said Michael Hewson at CMC Markets.
“This delay has inevitably led to criticism from some quarters, however it’s hard to see what a new lockdown would achieve at this point given that most people have become a lot more cautious less they contract the virus in any case.”
Meanwhile in Germany, Omicron worries and high inflation led to a cooling of sentiment among consumers with the GfK consumer confidence index falling to -6.8 from a revised figure of -1.8 for December. Spending on large purchases fell to levels not seen since the beginning of 2021.
In equity news, shares in French transport conglomerate Bollore soared after it received a €5.7bn offer from Mediterranean Shipping Company for its African logistics assets.
Semiconductor and chip stocks ASML Holding, ASM International, Infineon Tech and STMicroelectronics all rose after US chipmaker Micron Technology beat market expectations in its trading update.
