Finance News

European shares rise on indicators of hope over Omicron

LONDON – European stocks closed higher Thursday as traders searched for signs that the Omicron variant of the coronavirus is not as severe as previously feared.

The pan-European Stoxx 600 index closed 1%, with Travel and Leisure climbing 1.7% to lead gains amid optimism about Covid.

Airline stocks were among the top performers, with British Airways parent company IAG and Hungarian low-cost airline Wizz Air both gaining around 2%.

Investors responded to a study from South Africa – where the Omicron strain was first discovered – that suggests a lower risk of hospitalization and serious illness compared to Delta.

The study, which has not yet been peer-reviewed, found that people diagnosed with Omicron in the two months leading up to November in South Africa were less likely to be hospitalized than if they were given another variant during the same period.

Experts say it's too early to know for sure the severity of Omicron, but the study gives hope that both the human and economic costs of the strain won't be as high as originally feared. The rapid spread of Omicron has prompted governments around the world to re-implement some Covid restrictions to contain them.

More good news came on Wednesday when the U.S. Centers for Disease Control and Prevention approved a Pfizer Covid antiviral pill for those 12 years and older who are at risk of developing serious illness.

These glimmers of hope have spurred global equity markets. Across the Atlantic, the Dow and other major US averages all rose as investors looked past prior nervousness about Omicron.

Investors also digested data showing US consumer confidence rose in December despite fears about Omicron.

Back in Europe, Italian Prime Minister Mario Draghi said he was ready to become president of the country on Wednesday and said his government had laid the foundations for the key work to continue.

In company news on Wednesday, Ryanair said it had more than doubled its forecast for full-year losses, citing the emergence of travel restrictions in several major markets due to the coronavirus. Despite this forecast, the airline's share rose slightly on Thursday.

Looking at other individual stocks, United Internet lost less than 1% on Thursday after it became known that CEO Ralph Dommermuth has increased his stake in the company to 50.1% but will not make a voluntary takeover offer to shareholders.

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