Thu. Jan 20th, 2022


European equities opened higher as fears about the impact of the Omicron coronavirus variant diminished and Chinese authorities indicated efforts to stimulate the country’s slower economy.

The local Stoxx Europe 600, which carries heavyweights from industrial, financial and consumer goods businesses, added 1.4 percent in early trading on Tuesday. London’s FTSE 100 rose 0.9 percent.

Wall Street’s S&P 500 index closed 1.2 percent higher on Monday after more than a week of volatility driven by Omicron and expectations that the US Federal Reserve will tighten monetary policy.

An index of value of shares indexed on the S&P, which offers higher dividend yields and is expected to rise when economic growth prospects improve, Monday’s session ended 1.5 percent higher.

Scientists are still studying the severity of the Omicron variant and its potential to evade vaccines. Some early dates of South Africa has suggested that the strain may result in less serious diseases than previous waves of infections.

Meanwhile, China’s central bank on Monday reduce the level of deposits that lenders have to set aside in a move to add liquidity to the financial system, while the government’s top decision – making body has promised “flexible” monetary policy.

“With both actions and words, China’s policymakers are becoming more willing to facilitate policies to counter the sharp slowdown in growth,” Wei He, a China analyst at Gavekal Dragonomics, wrote in a note.

Hong Kong’s Hang Seng stock index rose 2.7 percent while Tokyo’s Topix closed 2.2 percent higher.

In government debt markets, yields on the 10-year US Treasury note benchmark rose by 0.02 percentage points to 1.45 percent as the price fell.

Brent crude rose 1.8 percent to $ 74.37 a barrel.

Unsecured – Markets, finance and strong opinion

Robert Armstrong dissects the major market trends and discusses how Wall Street’s best minds react to them. Sign in here to have the newsletter sent straight to your inbox every weekday



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