Stocks Slip, Dollar Climbs Before Bank Rate Decisions

European and US stocks mostly fell Monday at the start of a week set to be dominated by central bank decisions amid surging inflation.

"The heightened volatility and investor hesitation are understandable. After all, it's going to be a massive week for global monetary policy, with some 20 central banks set to decide on interest rates" and stimulus programs, said Fawad Razaqzada analyst at ThinkMarkets.

The Federal Reserve, Bank of Japan, Bank of England and European Central Bank are all holding policy meetings this week.

While central bankers were expected to act in response to soaring prices, removing stimulus in preparation for raising interest rates, the spread of the Omicron coronavirus variant could complicate plans and delay any rate hikes, according to analysts.

Wall Street hit a fresh record Friday despite US consumer prices posting the biggest increase in nearly four decades. Investors and economists expect the Fed to raise interest rates at least twice in 2022.

The dollar on Monday rose against major rivals, including the British pound which, like the FTSE 100 stocks index, was weighed down by Prime Minister Boris Johnson's warning of a looming "tidal wave" of Omicron.

As Britain confirmed its first death due to the Omicron variant, Johnson now wants to give all UK adults a booster jab by the new year.

A group of airlines on Monday accused the UK government of a "haphazard and disproportionate approach" to travel restrictions in the wake of the latest strain and demanded further state help to prevent a "permanent scarring" of the industry.

"The new restrictions that are due to start this week is prompting further weakness in the likes of airlines with IAG, easyJet, Ryanair and Wizz Air all sharply lower," said CMC Markets analyst Michael Hewson.

Elsewhere on the corporate front, Chinese artificial intelligence start-up SenseTime said it was postponing a planned $767-million initial public offering in Hong Kong after it was blacklisted by the United States over human rights concerns in Xinjiang.

It filed a statement with the Hong Kong stock exchange saying it would postpone its listing "to safeguard the interests of the potential investors" as they weigh the impact of being placed on the blacklist.

Oil prices slid back after gaining around 8 percent last week.

"It looks like Covid is once again the culprit as the rapidly spreading Omicron variant raises serious concerns over demand for crude oil as countries go back in partial or full lockdown," Razaqzada said.

New York - Dow: DOWN 0.9 percent at 35,650.95 (close)