Europe midday: Shares extend gains as airlines back in favour after Omicron slump

European markets continued their roller-coaster Omicron Covid-variant volatility ride on Wednesday morning as shares extended gains from the morning session.

The pan-European Stoxx 600 was up 1.01% after gains overnight on Wall Street and Asian shares. All major continental bourses outperformed the regional benchmark index, while US futures indicated a positive start.

"European markets are on the front foot today, as markets oscillate between overwhelming fear and bouts of optimism that this recent selloff could prove the perfect pre-cursor to a Santa rally," said IG analyst Joshua Mahony.

"Traders are having to base investment decisions on a limited amount of data, with each notable comment bringing knee-jerk reactions in financial markets. Contradictory comments from the likes of Moderna, Oxford, and BioNTech highlight the uncertainty over just how useful the current vaccinations will be for this new variant."

"With the risk of future lockdowns and economic closures, comments from the US Federal Reserve and Bank of England should be taken with a pinch of salt given how much they could change once we find out the full extent of this variant. Similarly, data is likely to lose some of its importance for the time being, with the risk of economic contraction expected to remove much of the relevance of the jobs reports released over the coming days."

In equity news, miners were in the black as copper prices rebounded on easing concerns about the new variant which emerged in Southern Africa last week.

Shares in airlines recovered as investors sought bargains, with IAG, Lufthansa, Wizz Air and easyJet all flying higher.

Oil stocks were up as crude prices gained ahead of an OPEC meeting where major producers will discuss how to respond to potentially lower demand against the backdrop of Omicron. Major producers BP and Shell rose in response.

Shares in Husqvarna rose after the company raised its overall financial targets and growth ambitions for robotic lawn mowers and other battery-powered products.