Global stocks mostly edge higher

Europe’s stock markets firmed Wednesday in low-volume festive trade, as investors mulled the Omicron coronavirus outlook and awaited key US economic growth data, dealers said.

Most Asian and European indices extended gains after their latest sell-off as investors assessed fallout from the fast-spreading Omicron variant -- and global attempts to contain it -- ahead of the Christmas and New Year break.

The British pound rose as traders digested official data showing a weaker-than-expected economic recovery and eyed a likely Covid-driven drop in the current fourth quarter.

The dollar advanced versus the euro and yen before third-quarter gross domestic product (GDP) figures in the United States, the world’s biggest economy.

In commodities, the natural gas market dipped from Tuesday’s record-breaking performance, but oil prices trod higher.

Christmas hibernation

“Investors are preparing to go into hibernation for Christmas and will hope by this time next week we’ll know a lot more about the trajectory of Omicron -- and the likelihood of further restrictions to contain it, and just how long those curbs will be in place,” said AJ Bell investment director Russ Mould.

“For now the markets, bar the odd day, have just about managed to hold on to the idea that, to employ central bankers’ favourite word of 2021, Omicron’s impact will be transitory.

“If that changes, we could see a more pronounced sell-off in global stocks as growth expectations for 2022 are rapidly reset.”

Global equities had recovered Tuesday from a fierce Omicron-fuelled sell-off but natural gas prices spiked to record peaks on winter demand and supply fears, fanning inflation woes.

Nevertheless, the year-and-a-half-long rally across markets has petered out in recent weeks on fears about the new Covid variant and government measures to counter it, which come just as central banks start to withdraw stimulus and tighten monetary policy to combat soaring inflation.