Asian markets fell again on Monday but oil rebounded strongly as investors try to assess the threat of the new Omicron Covid-19 strain on the global economic recovery. Equities around the world went into freefall on Friday on news of the heavily mutated variant, which some fear could evade vaccines, as it forced several governments to throw up flight bans from southern Africa where it was discovered and introduced fresh containment measures. The crisis added to an already jittery mood on trading floors caused by surging inflation and central banks starting to roll back their ultra-loose monetary policies to prevent prices from running out of control. “Omicron’s uncertainty has triggered a rethink on the global economic outlook,” said National Australia Bank’s Rodrigo Catril. “A new Covid-19 wave may or may not be more infectious or deadly, but until we know more markets are likely to remain jittery.” Some traders were taking solace in comments from two South African health experts who said that the symptoms of Omicron appeared to be mild so far, though the World Health Organization has urged caution. And analysts warned markets would remain on edge until more was known about the variant. “So perhaps we have a highly contagious, yet mild strain,” said Matt Simpson of StoneX Financial. “And if that is the case, markets could very well rally through December (as original fears recede) and markets refocus on Fed tightening and of course Santa’s rally.” But Priya Misra, at TD Securities, added “We really need some more answers to figure out the impact on growth.” “Risk assets are pricing in uncertainty.” All three main indexes on Wall Street ended more than two percent down, while London, Paris and Frankfurt were also pummelled at least 3.6 percent lower. But even those losses were dwarfed by crude, which fell off a cliff on its worst day since WTI went below $0 at the outset of the pandemic, with dealers fretting over the possible impact on demand if more lockdowns are introduced. And Asian equities, which also suffered hefty selling pressure, extended losses on Monday, though the selling was a lot lighter. Tokyo and Hong Kong flirted with positive territory in the morning but remained in the red, while Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington, Manila and Jakarta also retreated. But crude enjoyed a bounce, with WTI up more than five percent and Brent more than four percent higher, having cratered 13.1 percent and 11.5 percent, respectively, on Friday. The gains came as reports said that OPEC and other major producers were considering whether or not to continue their plan of raising output each month, in light of the latest rout and with the prospect of new shutdowns if Omicron becomes a major problem.