LDN - Business

Tech, miners lift European shares as Omicron worries fade

[December 07, 2021] By Anisha Sircar

(Reuters) -European stocks rose on Tuesday to their highest in more than a week, boosted by a strong rebound in technology shares as worries about the Omicron coronavirus variant ebbed, and gains in mining sector after China eased its monetary policy.

The continent-wide STOXX 600 index gained 1.8% to bounce back to levels before Nov. 26, when the index suffered its biggest selloff this year on worries about the new virus variant.

"You're seeing a surge in optimism as investors are saying, the knee-jerk defensive move during the big selloff may have been too hasty, as Omicron may not be as hideous as previously thought," said AJ Bell financial analyst Danni Hewson.

Technology stocks climbed 3.9% after hitting seven-week lows on Monday amid a wider selloff in high-growth names.

"There's relief that although global fiscal policy is set to tighten over the next six months, it's not going to be within the next month - and with Omicron, there's even more of a wait-and-see policy, which is giving investors confidence in tech and other stocks," added Hewson.

The STOXX 600 is now hovering around 5% below its record high from mid-November, while the Euro STOXX 50 volatility index, Europe's fear gauge, fell to 25.6. At the peak of the selloff in markets, it hit 33.1.

Mining stocks jumped 3.7% after China's central bank cut the amount of cash banks must hold in reserve, lifting metal prices on hopes of an economic boost to the world's top metal consumer. [MET/L]

[to top of second column]

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, December 6, 2021. REUTERS/Staff

Among individual stocks, British American Tobacco gained 2% after backing its full-year forecast, buoyed by more people switching to the tobacco giant's vaping and oral nicotine products.

Carmaker Stellantis advanced 1.7% on plans to generate around 4 billion euros ($4.52 billion) by 2026 and about 20 billion euros by 2030 from software offerings.

Telecom Italia climbed 1.3% after picking Goldman Sachs and LionTree to advise Italy's biggest telecoms group on the takeover bid by U.S. fund giant KKR.

French payment firm Worldline rose 1.1% after Eurobank, one of Greece's four largest lenders, agreed to sell 80% of its merchant acquiring business to the French payments firm in an effort to strengthen its capital base. Eurobank advanced 1.5%.

Defensive sectors such as utilities, telecoms and food & beverages were among the smallest gainers.

($1 = 0.8858 euros)

(Reporting by Anisha Sircar in Bengaluru; editing by Uttaresh.V and Shinjini Ganguli)

Back to top