Give the markets ten days and they may be back. That’s what Italian investment bank Mediobanca wrote to its clients last October after a variant of the SARS-CoV-2 delta virus emerged. Could history repeat itself with omicron?
During Friday’s trading after news of the new coronavirus variant emerged, global stock markets plunged by two trillion dollars. However, the start of the new trading week suggested that investors were scrambling over the weekend to get information about the dangers of the omicron variant. And stocks began to recover, even though the World Health Organization has identified omicron as a global threat.
But it is the experience with the delta variant that gives hope that things might not be as bad as they seemed as recently as Friday. On Monday, both US and European stocks gained. The Dow Jones Industrial Average was up around one per cent, the S&P 500 even stronger. The pan-European Stoxx 600 stock index added 0.69 per cent, while London’s FTSE 100 gained almost one per cent.
In contrast, stock markets in Asia still headed into negative territory during Monday. However, their weakening can be attributed to the time shift and the prevailing uncertainty about how trading will develop in Europe and the US after the weekend.
