US, Asian Stocks Rally Again, Europe Hits Pause

US and Asian stocks ended on a strong note once again on Wednesday on easing concerns over financial fallout from the coronavirus variant Omicron, while European stocks mostly dipped.

In New York, the broad-based S&P 500 gained 0.3 percent, helped by statements from drugmakers BioNTech and Pfizer that a third shot of their vaccine was effective at guarding against the new strain, while a two-dose regime will leave Omicron "not sufficiently neutralized."

After a rollercoaster ride since Omicron first burst onto the scene late last month, investors are now optimistic over the outlook in the run-up to Christmas.

Patrick J. O'Hare at Briefing.com said the emerging information about the Omicron variant is likely to turn the market's focus back to the shift in monetary policy by the US Federal Reserve.

"After all, if Omicron isn't going to be the pernicious force some first thought it could be, then economic activity should continue to run at a pretty healthy recovery pace that makes it clear the Fed's policy rate should not be hanging out much longer at the zero bound," he said.

With a Fed policy meeting looming next week, investors will be focused on Friday's consumer price index data as the central bank has signaled its concern about rising inflation, which could lead to multiple rate hikes next year.

Fears over fallout from China's debt-hobbled property sector dented sentiment however.

In Hong Kong, Chinese real estate company Kaisa suspended trading just before the opening bell, "pending the release by the company of an announcement containing inside information", according to a filing with the exchange.

Kaisa, China's 27th-largest property firm as well as one of its most indebted, became the latest company to spook investors when it announced on Friday that it had failed in a bid for a debt swap that would buy it crucial time.

China's real estate sector -- a key growth driver in the world's second-largest economy -- has cooled in recent months after Beijing tightened home-buying rules and launched a regulatory assault on speculation.

The moves have created headaches for several major developers, notably China Evergrande, the country's second-largest and which is billions of dollars in debt.

On Tuesday, Evergrande missed a deadline to repay some of its overseas creditors, raising the prospect of a default as it prepares for a government-backed restructuring.

"A few months ago, Evergrande's failure to make bond repayments spooked global markets and led to speculation of a potential crisis in China's property and financial system," said Russ Mould, investment director at AJ Bell.

"Now it seems as if markets have just accepted that Evergrande could collapse and there is no panic."