European markets rebound, shrugs off omicron variant

European stocks started the new trading week higher, despite extensive concerns over the newly discovered omicron Covid variant.

The pan-European Stoxx 600 climbed 0.9% in early trade, with travel and leisure stocks jumping 3% to lead gains, while autos fell 0.2%.

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, Belgium, the Netherlands, Germany, 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.

U.S. stock futures also moved higher in early premarket trading 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.

Elsewhere, shares in Asia-Pacific largely fell in Monday trade as markets struggled to regain confidence after the WHO announcement last Friday, when the Nikkei 225 in Japan and Hang Seng index in Hong Kong both fell more than 2% following the news.

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 3.7% to $75.43 per barrel on Monday morning while U.S. crude futures gained 4.3% to $71.09 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, cruise ship operator Carnival climbed 6.9%, beginning to bounce back from Friday’s plunge.

BT climbed 4.8% 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 5.8% after cutting its full-year guidance.