Europe Markets

European stocks close higher as fears ease over omicron Covid variant; BT shares up 6%

Key Points
  • Almost all sectors and major bourses traded in positive territory, with stocks looking to rebound from Friday's sell-off.
  • The World Health Organization labeled the new omicron strain a "variant of concern" on Friday.
  • The South African doctor who first spotted the new Covid mutation said symptoms were "extremely mild" so far.

LONDON — European stocks closed higher on Monday as concerns over the newly discovered omicron Covid variant appeared to ease.


The pan-European Stoxx 600 provisionally closed up by 0.8% with oil and gas shares climbing 2.2% to lead the gains. Almost all sectors and major bourses traded in positive territory, with stocks looking to rebound from Friday's sell-off.

The World Health Organization labeled the new omicron strain a "variant of concern" on Friday.

While scientists continue to research the variant, omicron's large number of mutations has raised alarm. Preliminary evidence suggests the strain has an increased risk of reinfection, according to the WHO.

The variant has been found in the U.K., Israel, Belgiumthe NetherlandsGermany, Italy, Australia and Hong Kong, but not yet in the U.S. Many countries, including the U.S., moved to restrict travel from southern Africa.

Still, investor nerves were calmed somewhat after the South African doctor who first spotted the new Covid mutation said symptoms were "extremely mild" so far.

To be sure, the U.N. health agency has said it will take weeks to understand how the variant may affect diagnostics, therapeutics and vaccines.

Vaccine makers have announced measures to investigate omicron with testing already underway. While it remains to be seen how omicron responds to current vaccines or whether new formulations are required, Moderna's Chief Medical Officer Paul Burton said Sunday the vaccine maker could roll out a reformulated vaccine against the omicron variant early next year.

U.S. stocks also moved higher on Monday following Friday's sell-off as investors look ahead to key economic data set to be released this week, including the November jobs report which is expected to show solid jobs growth. Economists surveyed by Dow Jones expect 581,000 jobs to have been added in November.

Elsewhere, shares in Asia-Pacific largely fell in Monday trade as markets struggled to regain confidence after the WHO announcement last Friday.

Oil prices were higher during early European trading hours, after Brent crude dropped as much as 13% on Friday, its worst day this year.

International benchmark Brent crude futures were up 2.8% to $74.79 per barrel on Monday morning while U.S. crude futures gained 3.8% to $70.78 per barrel.

On the data front, euro zone business climate and economic sentiment data eased in November as expected. The European Commission's economic sentiment gauge fell to 117.5 points from 118.6 in October, while inflation expectations pulled back slightly too.

In terms of individual share price movement, BT climbed 6.1% after a report suggested that Indian oil-to-telecom conglomerate Reliance is considering an offer for the British company.

At the bottom of the European blue chip index, French car parts group Faurecia fell 7.9% after cutting its full-year guidance.

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— CNBC's Ryan Browne, Hannah Miao and Eustance Huang contributed reporting to this story.