Global stocks hit a two-week high as tightening restrictions in some parts of the world to contain the Omicron variant of the coronavirus dampened optimism following encouraging news about vaccines.
European equities opened higher but were well below Wednesday’s high, US stock futures were mixed and Japan’s Nikkei blue-chip index fell nearly half a percentage point.
As a result, the MSCI global stock index hovered around two-week highs but struggled to make significant progress after three days of continuous gains.
News on Wednesday from drugmakers Pfizer and BioNTech that a triple course of COVID-19 vaccine has shown a neutralizing effect against the Omicron variant in laboratory tests delighted investors and lifted the S&P 500 to within 1 percent of the new one. record high.
But global markets have also sounded warnings as governments have taken new steps to contain the spread of the new option.
Late Wednesday, British Prime Minister Boris Johnson imposed tighter restrictions on COVID-19 in England.
“For Omicron, we still don’t know about the effectiveness of the vaccines, the distribution and the nature of this option,” said Guy Miller, chief market strategist for the Zurich Insurance Group.
“In the short term, it will be difficult to determine where the markets will go. In the long term, we still have many factors favoring the stock, ”he said, adding that he expects a strong macroeconomic environment next year, which should support the company’s earnings.
As risk appetite eased, the prices of risk-sensitive currencies and oil also eased slightly.
After rising 2.6% in three days, the upside-sensitive Aussie was unchanged at $ 0.7165.
Oil prices fell due to the start of trading in Europe. Futures for Brent crude oil fell 0.25 percent to $ 75.64 a barrel, and for American oil – by 0.11 percent to $ 72.29.
Hopes for an easing of monetary policy following a cut in bank reserves this week and rather favorable inflation figures on Thursday boosted shares in China and Asia outside of Japan, which surged 0.6 percent to a two-week high.
The blue-chip index CSI300 was up nearly 2% and gained almost 4% over the week. If it persists, it will be the biggest weekly jump since February.
Bonds suffered losses as hope for the outlook for the virus left a clearer path to higher rates. Traders’ attention was drawn to the publication of data on inflation in the US on Friday and the meeting of the Federal Reserve System next week to determine the timing of the increase.
Fed futures rates will be hiked next May, and on Wednesday the yield on the two-year Treasury bonds peaked since March 2020 at 0.7140%.
On Thursday, they remained stable at around 0.68%, while the 10-year bond yields held at 1.50% after jumping 4.6 basis points on Wednesday.
Economists expect headline annual inflation in the US last month to be 6.8%, although previous data came as a surprise for growth.
“The accelerated pace of the Fed’s cut is almost seen as a foregone conclusion,” analysts at ANZ Bank said, and outside of it looms the expectation of higher US interest rates in 2022. “But strong numbers could heighten expectations. growth in the second quarter of next year. “
In Europe, European Central Bank policymakers are aiming to temporarily strengthen its regular bond buying scheme, which will still significantly reduce overall debt purchases after its pandemic-fighting scheme ends in March, sources told Reuters.
The US dollar index hovered at 96.058 while the euro fell marginally to $ 1.1320.
The dollar fell one-fifth percent to 113.46 yen, while the pound sterling surpassed Wednesday’s annual low of $ 1.31615 per night following the announcement of tightening COVID-19 rules.
Gold has held steady at $ 1,782 an ounce, while Bitcoin appears to have found support at around $ 50,000.