European and US stock markets rose Wednesday in low-volume, pre-holiday trading as reassuring US data helped investors put aside Omicron coronavirus concerns.

Most indices extended gains after their latest sell-off, with data showing that American consumers were even more confident about the economy in December despite the rise of the fast-spreading Omicron variant.

Markets had slumped Monday on concerns that government efforts to contain the latest wave of coronavirus would stifle the economy.

The British pound rose as traders digested official data showing a weaker-than-expected economic recovery and eyed a likely Covid-driven drop in the current fourth quarter.

The dollar was mixed against the euro and yen as an update revised higher US third-quarter economic growth to 2.3 percent from 2.1 percent.

In commodities, the natural gas market dipped from Tuesday's record-breaking performance, but oil prices trod higher.

"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.

New cases of Omicron continued to soar, but market watchers are becoming more confident the health effects will be milder than with earlier strains.

"There's usually a big rally at the end of the year in stocks anyway," said Gregori Volokhine of Meeschaert Financial Services. "This year, people are feeling better that Omicron won't be as bad as Delta."

The Conference Board's US consumer confidence index jumped nearly four points to 115.8 in December compared to the prior month. Concerns about inflation and Covid-19 lessened, although the report warned of continued "headwinds" from those issues in early 2022.

Consumers remain upbeat despite the numerous challenges, "setting the stage for continued growth in early 2022," said Lynn Franco, head of economic indicators at the Conference Board which carries out the consumer sentiment survey.

Global equities had recovered Tuesday from a fierce Omicron-fueled sell-off but natural gas prices spiked to record peaks on winter demand and supply fears, fanning inflation woes.

Inflation has been a major preoccupation for consumers and policymakers in recent months, with central banks starting to withdraw stimulus and tighten monetary policy to combat soaring prices.

Higher interest rates slow economic activity, and with the emergence of the Omicron threat the year-and-a-half-long rally across markets has petered out in recent weeks.

But stock markets often see around the holidays a so-called Santa rally, as with most traders absent, those trying to buy shares push up prices.

Trader sentiment has been given a boost by hopes US authorities will give the green light to two pills from Pfizer and Merck to treat Covid
Trader sentiment has been given a boost by hopes US authorities will give the green light to two pills from Pfizer and Merck to treat Covid Pfizer via AFP / Handout

New York - Dow: UP 0.7 percent at 35,753.89 (close)

New York - S&P 500: UP 1.0 percent at 4,696.56 (close)

New York - Nasdaq: UP 1.2 percent at 15,521.89 (close)

London - FTSE 100: UP 0.6 percent at 7,341.66 (close)

Frankfurt - DAX: UP 0.9 percent at 15,593.47 (close)

Paris - CAC 40: UP 1.2 percent at 7,051.67 (close)

EURO STOXX 50: UP 1.0 percent at 4,241.27 (close)

Tokyo - Nikkei 225: UP 0.2 percent at 28,562.21 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 23,102.33 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,622.62 (close)

Euro/dollar: UP at $1.1333 from $1.1285 late on Tuesday

Pound/dollar: UP at $1.3356 from $1.3262

Euro/pound: DOWN at 84.80 pence from 85.09 pence

Brent North Sea crude: UP 1.80.7 percent at $75.29 per barrel

West Texas Intermediate: UP 2.3 percent at $72.76 per barrel