A-share Photo: VCG

As the discovery of the new Omicron variant of COVID-19 triggered global alarms and market sell-offs over the weekend, the Chinese stock market could also suffer once the session opens on Monday. However, analysts predict that Chinese investors may be "comparatively calmer" thanks to the government's swift response and organized handling of the COVID-19 pandemic over the past year.

The new potentially more contagious Omicron variant has been detected in a number of countries over the weekend, just days after it was identified in South Africa. Governments around the world are rushing to suspend travel in an effort to stop its spread.

On Sunday, most Gulf stock markets fell sharply in early trade, with the Saudi index suffering its biggest single-day fall in nearly two years, according to Reuters, while bourses on both sides of the Atlantic suffered their biggest falls in more than a year on Friday. On Wall Street, the Dow Jones Industrial Average was down 2.5 percent, tracking its worst day since late October 2020, and European stocks had their session in 17 months as financial markets digested the news.

Those concerns pummeled financial markets, especially affecting airlines and others in the travel sector, as well as oil which tumbled by about $10 a barrel, Reuters reported.

Dong Dengxin, Director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Sunday that "global investor sentiment is closely linked to how their governments handle the pandemic."

Chinese investors might be more confident than their counterparts because of the efficient handling by the government of the coronavirus pandemic domestically, Dong said, predicting that Chinese A-shares market may not fall that much on Monday's opening compared with other markets around the world.

Dong also noted that domestic prices of oil, a key commodity under state control, would also be maintained at a stable level regardless of the fluctuations in the global market. 

Zhang Wenhong, China's leading infectious disease specialist, said on Sunday that "the Omicron variant of the coronavirus will not exert any major impact on China as things stand," adding that the country's swift response and dynamic "zero-case" policy provide authorities with the ability to cope with any coronavirus variant.

Many countries are now reimposing health restrictions amid the unknown threat of Omicron, which the World Health Organization declared on Friday a "variant of concern," adding that it carries higher risks than other virus strains. Zhang, who is the head of the Shanghai COVID-19 medical team, downplayed the possibility of the new variant having a major impact on China with the current policy approach.