Concerns about the new Omicron variant of the COVID-19 virus kept a lid on investor sentiment on Tuesday. The benchmark S&P/ASX 200 gained 0.2 per cent to close at 7256 points, but did rise as much as 1.3 per cent during the day.

Merger and acquisition activity continued, with Credit Corp jumping 8.6 per cent after spending $60 million to purchase Radio Rentals. GUD Holdings was halted to raise capital for a $745 million cash and scrip offer to private equity owners of AutoPacific Group (APG).

Meanwhile, the economy shows signs of strength, except for housing permits, which came in lower than expected. The nation’s current account surplus increased $1 billion in the September quarter to a new record $23.9 billion, thanks to iron ore and coal prices.

“There was a raft of Australian data this morning which had no impact upon markets as Omicron uncertainty dominates,” RBC Capital Markets’ economist Su-Lin Ong wrote in a note to clients.

The balance of payments fed into estimates for Wednesday’s gross domestic product (GDP) number, which Ms Ong was now expecting to be up 2.8 per cent year on year, but down 2.9 per cent quarter on quarter.

“The composition of growth will be predictable and consistent with lockdown, with very weak private final demand driven by a sharp drop in household consumption and aided by a large inventory rundown, with both partly offset by strong public spending and net exports.“

While Omicron could potentially set back the recovery, the Reserve Bank of Australia had plenty of time to assess the impact as it was not expected to make any policy changes until February.

She noted the US, European and UK central banks all had meetings scheduled for this week.

On the ASX investors were clearly pleased with Collins Foods, the parent company of KFC and Taco Bell in Australia, which jumped 12.6 per cent after a strong first half.

The travel sector rebounded as the government only partially re-introduced quarantine requirements.

Webjet gained 5.2 per cent, Corporate Travel gained 4.7 per cent, and Qantas gained 3.3 per cent.

NAB and ANZ closed higher, but Commonwealth Bank shed 0.6 per cent and Westpac fell by 1.9 per cent after the corporate regulator announced six new cases against it. AMP jumped 3 per cent telling investors about a new strategy. Macquarie Group gained 1.4 per cent after completing a $1.3 billion capital raising.

BHP was up 2.1 per cent, while lithium miner Orocobre - soon to be renamed Allkem - gained 7.9 per cent. Rio Tinto declined by 2 per cent following an analyst briefing warning about higher production costs. And Fortescue declined by 3.3 per cent.