Europe open: Shares rebound from Omicron sell-off as BT bid talk spurs buyers
European share rebounded from Friday’s sharp sell-off in response to the emergence of the Omicron variant of Covid-19 as investors focused on a potential bid for UK telecoms group BT.
The pan-European Stoxx 600 index was up 0.82% in early deals after falling more than 3.6% in the last session as government’s moved to ban arrivals from Southern Africa where the variant was discovered. All major regional bourses were higher.
“The global economic recovery is set for an unwelcome detour as investors assess the potential impact of the new Omicron variant,” said Interactive Investor head of markets Richard Hunter.
“One such example of the potential concern has been the oil price, which fell sharply lower in anticipation of slowing demand. Some subsequent recovery is currently being seen and, although the recent losses have not been recouped, the oil price nonetheless remains ahead by 46% in the year to date.”
“There may be some lessening of volatility as more detail is released, and in any event the current malaise should delay the immediate pressure on monetary tightening as central banks assess the potential economic damage from the new strain.”
Oil prices rose after Brent crude dropped as much as 13% on Friday. International benchmark Brent crude futures were up 4.7% to $76.13 per barrel while US crude futures gained 5.3% to $71.72 per barrel.
In equity news, shares in BT jumped 8.6% after a report in India's Economic Times said Reliance Industries was weighing a bid for the British telecoms group.
Shares in French auto supplier Faurecia fell more than 6% as the company cut its full-year guidance for a second time, citing a drop in European car production, the impact of supply bottlenecks and Covid restrictions on operations and one-off costs in the US.