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European markets climb despite global concern over omicron variant; Stoxx 600 up 1.2%

LONDON — European stocks started the new trading week higher, despite extensive concerns over the newly discovered omicron Covid variant.

The pan-European Stoxx 600 climbed 1.2% in early trade, with travel and leisure stocks jumping 3% to lead gains as all sectors and major bourses traded in positive territory, with stocks looking to rebound from Friday’s sell-off.

The World Health Organization labeled the new omicron strain a “variant of concern” on Friday.

While scientists continue to research the variant, omicron’s large number of mutations has raised alarm. Preliminary evidence suggests the strain has an increased risk of reinfection, according to the WHO.

The variant has been found in the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong, but not yet in the U.S. Many countries, including the U.S., moved to restrict travel from southern Africa.

Vaccine makers have announced measures to investigate omicron with testing already underway. While it remains to be seen how omicron responds to current vaccines or whether new formulations are required, Moderna’s Chief Medical Officer Paul Burton said Sunday the vaccine maker could roll out a reformulated vaccine against the omicron variant early next year.

U.S. stock futures moved higher in overnight trading Sunday following Friday’s big sell-off as investors look ahead to key economic data set to be released this week, including the November jobs report on Friday which is expected to show solid jobs growth. Economists surveyed by Dow Jones expect 581,000 jobs added in November.

Elsewhere, shares in Asia-Pacific largely fell in Monday trade as markets struggled to regain confidence after the WHO announcement last Friday, when the Nikkei 225 in Japan and Hang Seng index in Hong Kong both fell more than 2% following the news.

Oil prices were higher during Asia trading hours, after dropping as much as 13% on Friday, its worst day this year.

International benchmark Brent crude futures were up 3.3% to $75.14 per barrel on Monday morning while U.S. crude futures gained 4.1% to $70.99 per barrel.

Key data releases in Europe on Monday included euro zone business climate and economic sentiment data for November, flash inflation data for Spain and Germany in November.

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— CNBC’s Hannah Miao and Eustance Huang contributed reporting to this story.

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