Dec 20 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com READY FOR A STOP-AND-GO PANDEMIC ENVIRONMENT (1051 GMT) With equities falling 1.5% after some governments across Europe enforced stricter lockdowns to face the Omicron threat, there seem to be little doubts about the pandemic being the big issue for risky assets even in 2022. But some investors think the outbreak impact on the economy will be less scary than the initial market reaction. “The obvious concern is that the mutations of the coronavirus mean we end up in a situation of repeated shutdowns,” Niall Gallagher, Investment Director, European Equities at GAM Investments, says in a research note about 2022. “Some of the panics from governments have been damaging.” “But we think most companies will be pretty well set, even if we are in for something of a stop/start environment, with the exception of those in travel which may be impacted,” he adds. The other risk, namely inflation, might “be pretty devastating for certain asset classes,” but “it’s not material,” according to GAM. Bottom line, investors should “gradually increase exposure towards some of these solid structural growth trends,” such as a super cycle for capital investment driven by governments to support the economy. Furthermore, the transition to net-zero emissions will require significant amounts of capital investment across the whole range of industries, energy networks and into residential property. (Stefano Rebaudo) ***** A SEA OF RED (0835 GMT) If you looked at price moves across European equity markets this morning you would know what a broad-based sell-off looks like. To give an idea of the Omicron-led risk-off move here are a few key milestones and facts: STOXX 600 down >2% to 10-day low 95.5% of STOXX posting losses All sub-sectors trading in the red, most down >2% Best performing sector: telecoms -1.2% Euro STOXX volatility index jumps to 2-week high Spain"s IBEX hits 10-month low snapshot snapshot (Danilo Masoni) ***** OMICRON FOR CHRISTMAS (0733 GMT) With the big central bank decisions out of the way, investors can now entirely focus on COVID-19 developments. And what they"re seeing isn"t looking good. The Dutch are in a lockdown, Europeans face new restrictions, and officials are urging Americans to get booster shots -- developments that are dashing hopes the end of the pandemic could be closer. And as Omicron tightens its grip on Christmas, so is risk-off sentiment. Futures point to European shares falling 2%, oil lost more than $2 a barrel in Asian trading, and safe-havens like gold and the Japanese yen are seeing good demand. The fear is that hospitalisations and deaths from Omicron could still put national health systems under pressure, given the rapid speed at which it spreads even though symptoms are mild. Add to that last week"s hawkish pivot by the Federal Reserve, fresh hurdles facing U.S. President Joe Biden"s $1.75 trillion investment bill, then worries over growth and confidence look well placed. Indeed, Goldman Sachs was quick off the blocks to trim U.S. growth forecasts for most of next year. Elsewhere, China cut its lending benchmark rate for the first time in 20 months to prop up its slowing economy, sending the yuan to a 10-day low. snapshot snapshot Key developments that should provide more direction to markets on Monday: Omicron threat looms over winter holidays in Europe and U.S. read more China cuts lending benchmark, market sees more easing in 2022 read more Manchin delivers potential fatal blow to Biden"s $1.75 trillion spending bill read more UK RightMove house prices (Danilo Masoni) ***** EUROPE: STOCK FUTURES DOWN 2% (0724 GMT) European shares look set for heavy losses at the open today with stock futures down between 1.7% and 2.2% as surging Omicron COVID-19 cases risk slowing the economic recovery. Over in Asia, shares fell to one-year lows and oil prices slid nearly 3%, reflecting the broader risk-off mood. U.S. futures are also falling after U.S. Senator Joe Manchin said he would not support President Joe Biden"s $1.75 trillion domestic investment bill. (Danilo Masoni)