STOXX 600 ticks up New record high in sight for Europe U.S. futures in positive territory Dec 29 - 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 OMICRON? NO GAME CHANGER FOR NOW (1050 GMT) It"s sure puzzling to see the STOXX 600 flirting with new historical highs despite the resurgent pandemic but for many strategists, Omicron doesn"t change the bright 2022 picture. "We do not see the recent Omicron variant as a game changer for our scenario, even if short term volatility could remain high", Indosuez Wealth Management analysts write in their Monthly House View for January. "Equities are supported by global economic growth above its long-term potential, central bank policy that is broadly accommodative (despite Fed tapering), and low real yields", they believe. "We continue to expect earnings to be the main driver of returns, similar to 2021, and the current consensus projections for next year (around 6-7% for the MSCI World) could slightly be revised on the upside", they add. European stocks in particular are expected to be a sweet spot next year given their attractive valuation. "Europe is a good hedge on potential rising bond yields as the weight of value sectors is higher than in the US", the Indosuez Wealth Management reads. In terms of sector, the asset manager is upbeat for tech. "The sector benefits from a combination of structural tailwinds like strong pricing power and growth of secular themes (digitalisation, artificial intelligence (AI), cloud, electric vehicles, internet of things…)". (Julien Ponthus) ***** EUROPE: JUST A WHISKER FROM A NEW RECORD HIGH (0922 GMT) Will it? Won"t it? The STOXX 600 has gently crept in striking distance of a new record high this morning, rising to 490.10 points, so just 0.48 points from its November 17 historic peak. The timing of such a performance is pretty counterintuitive given that Europe is facing its worst wave of infections since the start of the pandemic but hopes the Omicron variant proves milder is keeping the Santa rally going. As you can see below the November Omicron dip is close to being fully bought: record record (Julien Ponthus) ***** UK STOCKS DO THE HEAVY LIFTING AT THE OPEN (0830 GMT) If it wasn"t for the London stock market, European equities would probably have opened in negative territory. But with the FTSE 100 and 250 now cruising up 0.8% and 1.3% respectively, the pan-European STOXX 600 is above the floatation mark with a 0.2% rise. Paris is rising 0.15%, Madrid and Milan are roughly flat while Frankfurt is down about 0.2%. As you can see below, ten minutes after the opening bell, the vast majority of the best performing stocks of the STOXX 600 were trading in London: London London With the UK press wondering whether Prime Minister Boris Johnson could cut isolation time for people infected with COVID-19, the mood regarding the economic impact of Omicron isn"t as bad as it could be given the record number of cases. In terms of sectors, retail (+1.3%) is leading the way, followed by media (1%) and oil and gas (+0.6%). (Julien Ponthus) ***** SANTA RALLY RUNNING OUT OF GAS? (0715 GMT) European stock markets look set to open slightly in the red this morning after weak sessions in Asia and on Wall Street. Futures for Europe"s main benchmarks are down about 0.1% after the STOXX 600 pulled off a five-week high yesterday and France"s CAC 40 reached a new record. These milestones came in the context of record COVID-19 infections across the continent which haven"t so far changed the upbeat mood for equity markets. So far this month, the pan-European STOXX 600 is up 5.7% and over 16% in 2021. (Julien Ponthus)