European Stocks Rebound as Investors Buy the Omicron-Fueled Dip
(Bloomberg) -- European equities bounced back from the worst drop in three weeks amid optimism that growth can overcome risks from the omicron variant.
The Stoxx Europe 600 Index rose 1.4% by the close in London, the biggest gain in two weeks, with travel and leisure leading the advance. Energy and miners climbed as commodities recovered, and technology sector got a boost from Micron Technology Inc.’s upbeat forecast.
The Traditional Year-End Rally Might Be Canceled: Taking Stock
“Omicron is seen as causing a pause in the recovery but it’s clearer that the variant is more contagious but less lethal,” said Francisco Simon, head of discretionary tactical asset allocation for global multi-asset solutions at Santander Asset Management. “Omicron and hawkishness are the main drivers of the market moves in this year end.”
European shares have fallen from record highs in recent weeks amid concern about Covid-19 hurting the economic recovery and as central banks turn more hawkish in response to surging inflation. Also helping sentiment today was optimism that President Joe Biden hasn’t given up on his roughly $2 trillion Build Back Better plan after Senator Joe Manchin rejected it.
Among individual movers, Bollore SA jumped the most since February after getting an approach for its African transport and logistic business. Shares of Zur Rose Group AG and Shop Apotheke Europe NV sank over fresh concerns Germany will indefinitely postpone the introduction of mandatory e-prescriptions, considered the biggest growth driver for both companies.
- Equities: Euro Stoxx 50 up 1.7%, FTSE 100 up 1.4%, DAX up 1.4%, CAC 40 up 1.4%, FTSEMIB up 1.8%, IBEX 35 up 1.8%, AEX-Index up 1.6%, Swiss Market Index up 0.7%
- Bonds: German 10-year-yield up 6bps at -0.3%, Italian 10-year-yield up 8bps at 1.01%, Spanish 10-year-yield up 8bps at 0.44%
- Credit: iTraxx Main down 1.3bps at 50.2, iTraxx Crossover down 5.6bps at 254.1
- FX: Euro spot down 0.12% at 1.1266, Dollar index up 0.05% at 96.6
- Commodities: Brent crude up 2.9% at $73.6/bbl, copper up 0.9% at $9,536/MT, iron ore up 0.4% at $115.0/MT, gold down 0.3% at $1,786.36/oz
- 19 out of 20 Stoxx 600 sectors rise; utilities sector has the biggest volume at 112% of its 30-day average; 503 Stoxx 600 members gain, 91 decline
- Top Stoxx 600 outperformers include: Bollore +11.5%, Ryanair Holdings +10.6%, International Consolidated Airlines Group +6.9%, TUI +6.6%, Deutsche Lufthansa +6.6%
- Top Stoxx 600 underperformers include: Zur Rose Group -16.0%, Evotec -4.6%, ALK-Abello -3.2%, AutoStore Holdings -2.9%, Ocado Group -2.7%
- For a daily wrap highlighting the biggest movers among EMEA stocks, click here
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