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Emotional and short-term: Kremlin on stock market reaction to Omicron strain

Dmitry Peskov pointed out that the markets' reaction would be short-term
Russian Presidential Spokesman Dmitry Peskov Mikhail Metzel/TASS
Russian Presidential Spokesman Dmitry Peskov
© Mikhail Metzel/TASS

MOSCOW, November 29. /TASS/. Kremlin spokesman Dmitry Peskov believes that the reaction of the stock markets to the emergence of the new SARS-CoV-2 new variant, Omicron, will be short-term, calling the markets’ reaction to the new strain "emotional."

"We see that the reaction on the markets is purely emotional, it does not rest on any scientific data because so far such data does not exist," he stressed talking to reporters on Monday.

When asked if he thinks that the market reaction will be short-term, Peskov replied: "Definitely, this is a purely emotional reaction."

On Friday, one of the key US stock indices, Dow Jones, dropped 2.5% to 34,899.34 amid reports of the spread of the omicron. In percentage terms, this is the biggest decline of the index on a day of trading since October 2020. Other major US indices also dropped significantly. The S&P 500 index fell 2.3% to 4,594.62 points, the Nasdaq index fell 2.2% to 15,491.66 points. For all three indices, this is the most significant drop on Black Friday in the entire history of trading - usually markets go up on this day due to a sharp jump in spending.

On Friday, the World Health Organization (WHO) designated the B.1.1.529 variant as a "Variant of Concern" and assigned it the Greek letter Omicron. It also said that the new variant has "a large number of mutations, some of which are concerning." "Preliminary evidence suggests an increased risk of reinfection with this variant, as compared to other VOCs," it said.