European shares opened sharply higher on Tuesday as investors continued to punt on the new Omicron variant of the coronavirus may not be as severe as first thought.
The pan-European Stoxx 600 index was up 1.49% with all major regional bourses following suit. In Asia, Chinese property stocks rose after Beijing which cut the amount of cash that banks must hold in reserve releasing about $188bn of funds in long-term liquidity.
“Following on from yesterday’s indicative news from South Africa that the new Covid-19 variant could be milder than previous versions symptom-wise, much the same message was reinforced by the US’ Dr Anthony Fauci overnight,” said Oanda analyst Jeffrey Halley.
“That was all markets needed to hear really and equity markets in Europe and the US followed Asia’s lead and piled back in.”
Oil prices rose again, consolidating a nearly 5% rebound the day before.
“It looks as though oil could be setting itself up for a period of gains after six consecutive weeks in the red, following a rally on Wall Street last night with the Dow leading the charge,” said Victoria Scholar, head of investment at Interactive Investor.
“Encouraging developments around Omicron, Saudi Arabia lifting official selling prices, talks between the US and Iran breaking off last week and a push above key technical resistance hurdles have helped support the oil market.”
In equity news, Belgian pharmaceutical company Galapagos gained more than 6% in early trade.
Shares in Ferguson rose almost 5% as the plumbing and heating distributor said its expectations for annual results had increased after a surge in first-quarter profit.
UK polymer company Victrex fell 6%, handing back Monday’s gains on the back of its earnings report.
