There was a dramatic reduction in European equity volatility on Wednesday as markets began to trade sideways into the Christmas holidays.
Having experiences a number of trading sessions with swings in the region of 1%, the FTSE 100 was up just 0.09% around midday on Wednesday.
The German Dax was 0.24% higher whilst the French CAC gained 0.2%. The Eurozone’s two largest domestic indices have been subject to significant volatility as they imposed COVID restrictions into a backdrop of uncertainty around Omicron.
“Investors are preparing to go into hibernation for Christmas and will hope by this time next week we’ll know a lot more about the trajectory of Omicron and the likelihood of further restrictions to contain it, and just how long those curbs will be in place,” said AJ Bell investment director Russ Mould.
“For now the markets, bar the odd day, have just about managed to hold on to the idea that, to employ central bankers’ favourite word of 2021, Omicron’s impact will be transitory.
“If that changes, we could see a more pronounced sell-off in global stocks as growth expectations for 2022 are rapidly reset.”
There is view building in markets that Omicron may not be a economically damaging as first thought and the slight ease in concern has been enough for some traders to turn off their screens and settle in for the holidays.
71 of the 100 shares included in the FTSE 100 were higher at the time of writing.
The top risers again included IAG which continued to be bought into by bargain hunters. Rio Tinto was among the fallers after it announced the acquisition of a lithium mine for $825 million.