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LONDON, December 1 (Reuters) – Stock markets surged higher on Wednesday, reversing much of the losses from the previous session, as investors took advantage of lower prices to start December by betting that the latest variant of COVID- 19 would not derail the economic recovery.

EUROSTOX (.STOXX) rose 0.91% while the UK FTSE 100 (.FTSE) rose 1.24% and the German DAX (.GDAXI) 1.39%. Wall Street futures showed a strong open, with the S&P 500 and Nasdaq 100 showing a rise of more than 1%.

MSCI’s worldwide stock gauge (.MIWD00000PUS) had gained 0.48% by 11:20 GMT on Wednesday, after losing 1.5% the day before, when investors took fright at a warning from drugmaker Moderna according to which existing vaccines are unlikely to be as effective against the Omicron Variant.

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Countries have responded by tightening restrictions and imposing travel restrictions in parts of the world. Read more

Global markets also came under selling pressure on Tuesday after Federal Reserve Chairman Jerome Powell said asset purchases may need to be cut more quickly to fight rising inflation.

In Asia, equities (.MIAPJ0000PUS) rose 1.1% as traders reversed course after a sharp drop the day before that took the regional benchmark to a 12-month low.

“We anticipate that the market focus will gradually shift away from Omicron and move towards positive growth and earnings trajectory, allowing stocks to resume their higher price, and for some of the cyclical markets particularly affected by downturns. recent developments, particularly in Japan, the eurozone, energy and financials, are outperforming, ”said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Oil also rebounded from sharp drops in the previous session, ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC). Read more

US West Texas Intermediate (WTI) crude futures rose 3.88% to $ 68.75 a barrel. Brent crude futures gained 4.54%, to $ 72.37 per barrel, but remained well below the $ 82 per barrel levels seen last week.

INCREASING YIELD

Despite Wednesday’s bullish sentiment, some analysts said markets would be wise to focus on Fed Chairman Powell’s latest comments.

He said on Tuesday that U.S. central bankers would discuss in December whether to end their bond purchases a few months earlier than expected. Read more

“Right now the market is focused on Omicron and the potential that can disrupt the world, but the real focus should be on the Fed and rate policy. That’s the biggest shock to come out of the last few days.” , Kerry said. Craig, Global Market Strategist at JPMorgan Asset Management.

Powell’s comments had pushed US Treasury yields higher, particularly at the short end of the curve.

The yield on the two-year notes, which reflects short-term interest rate expectations, reached 0.622% on Wednesday, from 0.4410% on Tuesday, when traders speculated that the new variant could lead to a Fed. more accommodating. .

The 2-year yield last traded at 0.603%, up 1 basis point.

Benchmark 10-year bonds last fell 1.494%, from 1.444%, Tuesday’s two-and-a-half-month low.

Rising yields in the United States allowed the dollar to stabilize against most of its peers and gain ground against the Japanese currency. Against the safe haven yen, it rose 0.2% to 113.38 yen on the more risk-friendly mood. FRX

The euro / dollar traded at $ 1.133, leaving the single currency close to last week’s 17-month lows at $ 1.186.

Improving sentiment helped the Australian dollar which rose 0.4% from Tuesday’s 13-month low.

Equities in risk-sensitive emerging markets and some currencies rebounded. The Turkish lira jumped to 5% from near-record lows after the central bank said it intervened due to “unhealthy” market prices. Read more

Gold, despite all the excitement, saw little safe-haven demand with a spot price of $ 1,786 an ounce, up 0.7%.

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Additional reporting by Alun John in Hong Kong; Editing by Simon Cameron-Moore and Angus MacSwan

Our Standards: Thomson Reuters Trust Principles.

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