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World stock prices gain on strong U.S. holiday sales

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By Katanga Johnson

WASHINGTON (Reuters) - Global stock markets rose on Monday and oil prices eased as investors hailed strong U.S. holiday season sales and some grew less fearful about economic damage from the Omicron variant of COVID-19.

Still, fears that the pandemic could hurt economic growth pushed gold prices to the highest in more than a week despite pressure from a firmer U.S. dollar.

A Mastercard Inc survey showed a substantial rise in U.S. holiday season retail sales. This fueled investor optimism, boosting Wall Street and lifting a gauge of stocks across the globe by 0.87%. European gains offset earlier weakness across Asian markets.

Some investors grew confident a global recovery would regain steam next year even though the pandemic has prompted U.S. airlines to cancel or delay thousands of flights due to staff shortages, while several cruise ships had to cancel stops after COVID-19 outbreaks aboard.

In Asia, China reported its highest daily rise in local COVID-19 cases in 21 months as infections more than doubled in the northwestern city of Xian, its latest hotspot.

In France, the government convened a special meeting that could trigger new restrictions after the country hit another infection record.

Spot gold added 0.1% to $1,811.92 an ounce.

Wall Street's main stock indexes notched their fourth straight session of gains, after reports last week that the highly infectious Omicron variant may not be as deadly as earlier types of COVID-19.

"Heading into 2022 we will still have COVID uncertainties but the good news is that, according to the WHO, we may be see the end of the pandemic towards the end of year," said Jawaid Afsar, sales trader at Securequity.

He added that next year markets must also contend with other issues, ranging from inflationary pressures to policy tightening and geopolitical risks.

Looking ahead, thin trading volumes ahead of New Year could make markets volatile. Still, since 1945, the last five trading days of December and the first two days of January have boded well for U.S. stocks 75% of the time, according to CFRA Research data.

The pan-European STOXX 600 index rose 0.62%, nearing its highest level in over a month.

Mainland Chinese shares weakened, with Shanghai's benchmark sliding 0.4% and an index of blue chips retreating less than 0.1%. Property stocks did get a lift, though, after China's central bank vowed to promote healthy development of the real estate market.

Australia, Hong Kong and Britain were among markets closed on Monday for holidays.

DOLLAR RANGEBOUND

On Wall Street, the Dow Jones Industrial Average rose 0.98%, while the S&P 500 gained 1.38% after hitting a record high during the session. The Nasdaq Composite added 1.39%.

In debt markets, U.S. Treasuries 10-year yields held below Thursday's high of just above 1.5%.

In foreign exchange markets, the dollar was rangebound, despite a hawkish turn at the Federal Reserve this month that saw policymakers signal three quarter-point rate hikes in 2022.

The dollar index fell 0.026%, with the euro up 0.01% to $1.1326

In the crude market, U.S. crude recently rose 3.04% to $76.03 per barrel and Brent was at $78.94, up 3.68% on the day.

(Reporting by Katanga Johnson in Washington; Additonal reporting bu Danilo Masoni in Milan and Kevin Buckland in Tokyo; Editing by Pravin Char, Alexander Smith and David Gregorio)

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