Stocks slide as Omicron worries bolster safe-haven stocks

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NEW YORK, Dec. 17 (Reuters) – Global stock indices and oil prices fell on Friday as safe-haven stocks such as the dollar and Treasuries rose as investors grappled with the growing number of deals Omicron and a hawkish turn by the main central banks in the fight against inflation.

Asian stocks closed near year-round lows and broad European stock indices slipped 0.5%. Yields on Treasury bonds hit their lowest levels since early December.

“Central bankers have delivered a hawk for the holidays. The remainder of 2021 will be devoted to the ramifications of Omicron and any associated restrictions and / or delays in getting back to normal,” said Ian Lyngen, chief strategy officer. US rates at BMO. Capital markets.

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MSCI’s stock gauge across the world (.MIWD00000PUS) fell 0.84%.

On Wall Street, the Dow Jones Industrial Average (.DJI) lost 531.08 points, or 1.48%, to 35,366.56, the S&P 500 (.SPX) lost 48.12 points, or 1.03 %, to 4,620.55, and the Nasdaq Composite (.IXIC) fell 10.75 points, or 0.07%, to 15,169.68.

U.S. stocks have reversed all of their gains since Wednesday, when markets hailed the Federal Reserve’s pledge to tackle rising inflation with faster bond cuts and year-round interest rate hikes. next.

The hawkish tilt of central banks this week, including the Fed and the Bank of England and to a lesser extent the European Central Bank, was initially greeted by a wave of buying from investors convinced policymakers would curb the market. rising inflation.

But the mood has turned darker as traders worry that markets swollen with cheap money are vulnerable to the slightest pullback in stimulus measures.

“Volatility is on the rise again, reducing the predictability of what could happen next,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

The Bank of Japan cut some emergency pandemic financing on Friday, but maintained its policy of extreme flexibility and expanded financial assistance to small businesses, raising expectations that it will remain among the most central banks. accommodating for the foreseeable future. Read more

The benchmark 10-year notes last rose 5/32 to a return of 1.4072%, up from 1.422% on Thursday night. The dollar index rose 0.728%.

Added to caution are concerns that rising Omicron infection rates mean a tough few months for the global economy, although most economists believe the damage will be much less than in previous waves of case of COVID-19.

“Ordinarily, following a more hawkish (Fed) outcome, yields are expected to rise in anticipation of the Fed’s tightening cycle,” Westpac analysts said.

“However, there are currently competing dynamics, with lingering fears of inflation triggering harsher Fed rhetoric being offset by fears that economic growth will be interrupted by Omicron in the near term,” they added.

Pfizer said on Friday that the coronavirus pandemic could extend until 2023. read more

Oil prices fell, with US crude losing 2.72% to $ 70.41 a barrel and Brent falling to $ 73.18, down 2.45% on the day.

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Reporting by David Randall and Tommy Wilkes; Editing by Angus MacSwan and Leslie Adler

Our Standards: Thomson Reuters Trust Principles.

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