PARIS: Stock markets rose on Tuesday as investors appeared confident that the Omicron coronavirus variant will not derail the global economic recovery.
Covid-19 cases have surged across the world, prompting governments to impose new measures to limit contagion while the travel industry faced thousands of flight cancellations.
Experts caution against too much optimism around early indications that Omicron causes less severe disease than previous strains, pointing out that it is spreading so fast it could still overwhelm health systems.
But investors seem to be reassured about its effects on the economy.
"The equity markets have been on the rise, buoyed by reports that Omicron is less severe than Delta (variant) and may not impact the US economy as much as feared," wrote OANDA market analyst Kenny Fisher.
Frankfurt's DAX index was up 0.6 percent in lunchtime trading while the Paris CAC 40 was 0.4 percent higher after hitting a new record earlier in the day. London was closed for a holiday.
This followed strong gains on Wall Street on Monday, as the S&P 500 powered ahead 1.4 percent to a second straight record while the Dow and Nasdaq added at least one percent.
It was the start of a historically strong seven-day post-Christmas stretch known on trading floors as the "Santa Claus rally": a period of low trading volumes and light news flow that usually sees stocks drift higher.
The optimistic risk-on appetite carried over to Asia, with Tokyo leading the charge to close 1.4 percent higher while Singapore, Seoul, Jakarta and Kuala Lumpur were all well into positive territory.
"Investors were comfortably buying back shares after watching US rallies," said Yoshihiro Okumura of Chibagin Asset Management.
European shares inch up in thin trading
"Although investors are concerned about Omicron, they are also expecting an economic recovery next year," Okumura told AFP.
Shanghai recovered from early losses to end 0.4 percent higher while Hong Kong closed up 0.2 percent in a see-saw session as Macau casino stocks fell sharply after the gaming enclave reported its first Omicron case.
Key figures around 1200 GMT
Frankfurt - DAX: UP 0.62 percent at 15,933.39 points
Paris - CAC 40: UP 0.4 percent at 7,170.99
Tokyo - Nikkei 225: UP 1.4 percent at 29,069.16 (close)
Hong Kong - Hang Seng Index: UP 0.2 percent at 23,280.56 (close)
Shanghai - Composite: UP 0.4 percent at 3,630.11 (close)
New York - Dow: UP 1.0 percent at 36,302.38 (close)
London - FTSE 100: FLAT at 7,372.10 points (Friday close)
Euro/dollar: UP at $1.1331 from $1.1329 late on Monday
Pound/dollar: UP at $1.3454 from $1.3440
Euro/pound: DOWN at 84.23 pence from 84.26 pence
Dollar/yen: DOWN at 114.85 yen from 114.88 yen
West Texas Intermediate: UP 1.6 percent at $76.78 per barrel
Brent North Sea crude: UP 1.4 percent at $79.70 per barrel