Markets dip as Omicron spreads, FED decision looms

U.S. stocks were lower after the close on Monday, as losses in the Oil & Gas, Consumer Services and Technology sectors led shares lower. At the close in NYSE, the Dow Jones Industrial Average lost 0.89%, while the S&P 500 index lost 0.91%, and the NASDAQ Composite index lost 1.39%.

European shares ended lower on Monday, especially, travel and energy stocks over rising Omicron variant risks, while a wave of central bank policy decisions this week kept investor sentiment subdued. The pan-European benchmark STOXX 600 erased early session gains to end 0.4% lower, marking its fourth consecutive day in the red. London’s FTSE 100 and FTSE 250 dropped 0.8% and 1.2% respectively, to mark their worst session in two weeks. UK travel stocks dropped 3.5%. Investor focus is on monetary policy decisions that are expected to be taken by the European Central Bank (ECB), the U.S. Federal Reserve, the Bank of England and the Bank of Japan this week.

Asian stocks were mostly down on Tuesday as the spread of the Omicron coronavirus variant rattled investors who were already on edge ahead of a slew of central bank decisions this week, including a key Federal Reserve meeting. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.77%, as the Asian Development Bank (ADB) trimmed its growth forecast for developing Asia, reflecting risks brought on by the new virus variant. China’s CSI300 index was 0.39% lower, after health authorities in Tianjin detected the country’s first Omicron case, while Britain reported the first death from the variant. Hong Kong’s Hang Seng Index was down 1.2%, also dragged down by persistent concerns over the health of China’s property sector.

By Monday evening, the Russian stock market intensified its fall due to geopolitical risks and ended trading with the collapse of the Moscow Exchange and RTS indices by 3.8% and 4%, respectively. The Moscow Exchange index fell by 3.77% to 3618.31 points. The RTS index fell by 3.98%  to 1548.09 points.

Oil prices eked out small gains on Tuesday, recouping losses earlier in the day triggered by investor worries about demand after renewed restrictions were imposed in Europe and Asia amid a rise in coronavirus cases. Brent crude oil futures gained 0.38%, while U.S. West Texas Intermediate (WTI) crude futures increased by 0.35%.