(Alliance News) - Stock prices in London were seen opening almost unchanged on Wednesday despite a strong close in the US overnight, as investors digested the latest developments surrounding the Omicron variant of Covid-19.
IG futures indicate the FTSE 100 index is to open 0.90 of a point lower at 7,339.00. The blue-chip index closed up 107.62 points, or 1.5%, at 7,339.90.
In the US on Tuesday, Wall Street ended sharply higher, with the Dow Jones Industrial Average up 1.4%, S&P 500 up 2.1% and Nasdaq Composite up 3.0%.
The Japanese Nikkei 225 index closed up 1.4%. In China, the Shanghai Composite was up 1.1%, though the Hang Seng index in Hong Kong was up just 0.2%. The S&P/ASX 200 in Sydney finished 1.3% higher.
Omicron does not appear to cause more severe disease than previous Covid variants, and is "highly unlikely" to fully dodge vaccine protections, a top WHO official told AFP.
The World Health Organization's second-in-command, said while a lot remained to be learned about the new, heavily mutated variant of Covid-19, preliminary data indicated it did not make people sicker than Delta and other strains.
"The preliminary data doesn't indicate that this is more severe. In fact, if anything, the direction is towards less severity," WHO emergencies director Michael Ryan said in an interview, insisting though that more research was needed.
The Pfizer-BioNTech vaccine still provides some protection in the face of the Omicron variant, but its potency is sharply reduced, a South African lab study published on Tuesday has suggested.
A small study - testing 14 plasma samples from 12 participants - from the Africa Health Research Institute in Durban found that Omicron resulted in a 41-fold decline in neutralising antibodies produced by people who had received a two-dose regimen of the Pfizer vaccine.
However, Omicron's escape of the Pfizer vaccine was "extensive but incomplete". The study noted that those who had been previously infected as well as vaccinated showed higher neutralisation rates than those only vaccinated.
"This week's price action so far has been a complete contrast to last week's schizophrenic back and forth. The last two days have been ones of unbridled optimism that for all the concerns about Omicron, there is a growing hope that for all the concerns about its greater transmissibility, that any fallout is likely to be mild, and that when it comes to hospitalisations and deaths, the outcomes are likely to be better than Delta," commented CMC Markets analyst Michael Hewson.
"The gains in equity markets we are seeing are all the more surprising given that they are coming against a backdrop of rising inflationary risk, and central banks that are likely to start withdrawing some of their monetary policy support in the weeks and months ahead. Today's European open could well see a modest pause on a day that is fairly data light."
The pound was quoted at USD1.3253 early Tuesday, up from USD1.3224 at the London equities close Monday.
The euro was priced at USD1.1291, higher against USD1.1241. Against the Japanese yen, the dollar was trading at JPY113.52, soft from JPY113.58.
Brent oil was quoted at USD75.33 a barrel Wednesday morning, up from USD74.74 late on Tuesday. Gold stood at USD1,791.05 an ounce, higher against USD1,785.50.
In a quiet international economic calendar on Wednesday, there are US MBA mortgage applications in the afternoon, along with a rate decision from the Bank of Canada.
The UK corporate calendar has interim results from housebuilder Berkeley, fashion retailer Quiz, and bus operator Stagecoach, while annual results are due from stockbroker Numis and foodservice firm SSP.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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