European equities extend gains as Omicron fears fade

LONDON — Europe's major stock markets advanced on Wednesday as investors drew strength from easing Omicron virus concerns and shrugged off a mixed performance on Wall Street and in Asia.

US stocks were mixed in early trading as traders awaited the minutes of the latest Federal Reserve meeting that could signal when the central bank is likely to hike interest rates.

Traders have grown wary of the Fed, which has indicated it may hike rates repeatedly next year to curb inflation, potentially dampening the US stock rally enjoyed throughout the COVID-19 pandemic.

London firmed 0.1 per cent, while Frankfurt jumped 0.7 per cent to come within a whisker of its all-time high, and Paris won 0.8 per cent as it pushed further into record territory.

On Wall Street, the Dow continued to climb from its record closing high at the opening bell on Wednesday, but both the S&P 500 and the tech-heavy Nasdaq Composite moved further lower.

Markets wavered in Asia after a tepid overnight Wall Street lead, with inflation and expected interest rate hikes returning to the fore as Omicron fears ease.

In foreign exchange, the dollar slid versus the euro before minutes from the US Federal Reserve's latest interest rate meeting.

Oil rose further after climbing on Tuesday, when the Organisation of the Petroleum exporting Countries and its allies agreed as expected to raise output by 400,000 barrels per day in February.

"Overall, risk appetite remains positive," said ThinkMarkets analyst Fawad Razaqzada.

"The biggest driver behind this is relief that Omicron is not as deadly as Delta, which is fuelling expectations that travel restrictions and lockdowns will be lifted soon."

Omicron relief rally 

While the new COVID variant continues to spread rapidly around the world, forcing governments to maintain containment measures, its apparently milder symptoms have also allowed traders to focus more on future economic policies and plans to rein in surging prices.

China tech sector weighs 

Chinese technology firms, which have been hit by a crackdown from China's government, were a big drag on Hong Kong as it sank more than one per cent.

Concerns about a new COVID outbreak in the city that has led to the reimposition of containment measures added to the glum mood.

Shanghai stocks also slid but Tokyo clung onto positive territory.

In company news, China Mobile briefly soared around 10 per cent on its debut in Shanghai after the telecoms giant was delisted in New York under a standoff between Beijing and Washington. It ended only slightly higher, however.

The share offer is expected to raise $8.8 billion after the company exercises an over-allotment option, according to Bloomberg News, making it the largest on China's domestic stock markets for more than a decade.