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European markets climb as investors monitor omicron and big week for central banks

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LONDON — European stocks traded in positive territory on Tuesday morning, but sentiment remains cautious amid the continuing spread of the omicron Covid variant.

The pan-European Stoxx 600 climbed 0.6% in early trade, with basic resources adding 1.1% to lead gains as all sectors and major bourses nudged into positive territory.

European stocks slipped Monday as traders reacted to developments regarding the omicron Covid variant. U.K. Prime Minister Boris Johnson confirmed yesterday that at least one patient infected with the new omicron variant of Covid-19 has died in the country.

Mainland China reported its first case of the omicron Covid variant Monday in the city of Tianjin, about a two hours’ drive from capital Beijing.

Investors are also focused this week on central bank action with the U.S. Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank all due to announce monetary policy decisions.

The Federal Reserve’s two-day policy meeting begins Tuesday where the policymakers are expected to discuss speeding up the end of its bond-buying program.

The meeting comes as inflation data, released last Friday, came in at 6.8% in November year over year for the biggest surge since 1982. The print was marginally higher than the 6.7% Dow Jones estimate.

U.S. stock index futures inched higher during early premarket trading on Tuesday after the major averages started the week in the red as Covid omicron fears hit sentiment.

In Asia-Pacific markets overnight, Chinese stocks declined, tracking other losses in the region, as the omicron variant returned to focus. Meanwhile, bitcoin prices continued to tumble after some losses overnight.

Earnings come from Ocado on Tuesday and data releases include U.K. employment data and euro zone industrial production figures for October.

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— CNBC’s Pippa Stevens and Weizhen Tan contributed to this report.

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