Travel and banking stocks take Europe’s STOXX 600 to new heights

The DAX chart of the German stock index is pictured on the stock exchange in Frankfurt, Germany on December 30, 2021. REUTERS / Staff

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  • STOXX 600 reaches new heights
  • BA owner IAG jumps 10%
  • Food delivery stocks are slipping

Jan. 4 (Reuters) – European stocks extended the New Year’s rally on Tuesday, driven by economy-sensitive shares of travel, banking and commodities on new signs that the Omicron virus variant may be less serious than initially feared.

The pan-European STOXX 600 (.STOXX) index rose 0.6% to 493.1 points, reaching a record high after Wall Street’s S&P 500 (.SPX) and Dow (.DJI) closed at lows. historic peaks at night.

The European Travel and Leisure Index (.SXTP) jumped 3.3% to its highest level in more than six weeks. British airlines shone, with Ryanair (RYA.I) and British Airways owner IAG (ICAG.L) climbing 9% to 10%, while Wizz Air (WIZZ.L) jumped 10% after gaining reported an increase in traffic in December.

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London’s FTSE 100 (.FTSE) gained 1.3%, catching a global rally as trade resumed after a long holiday weekend.

“There are tentative signs that this variant may not be as bad as feared,” said Max Kettner, chief multi-asset strategist at HSBC, in a note.

“UK hospitalizations have increased over the past two days, but the link clearly appears to be weaker than in the previous winter wave. As such, the sensitivity of cases to hospitalizations has barely budged until present. If this trend were to continue, that’s good news. “

The British Vaccines Minister said people hospitalized with COVID-19 in the UK were showing less severe symptoms overall than before. Read more

French Finance Minister Bruno Le Maire said that while the surge of the fast-spreading Omicron variant disrupted some sectors, it did not risk “crippling” the economy and stuck to a forecast of growth of 4% for the GDP of 2022. Read more

Stock markets in Europe and the United States hit a series of record highs in 2021, as vaccine deployments and huge stimulus packages to boost the pandemic-stricken global economy offset concerns about the persistence of ‘high inflation and the new variants of COVID-19.

The STOXX 600 gained 22.2% last year, while the New York S&P 500 climbed 26.9%.

European banks (.SX7P) jumped 2.1% to reach November highs as government bond yields on both sides of the Atlantic were boosted by expectations of tightening monetary policy.

Home inventories including food delivery companies Delivery Hero (DHER.DE) and Just Eat (TKWY.AS) fell more than 2%, while health names Novo Nordisk (NOVOb .CO), Roche and AstraZeneca (AZN .L) were some of the best brakes in the STOXX 600.

Meanwhile, data showed German unemployment fell more than expected in December, further sign that the labor market in Europe’s largest economy remains resilient despite rising COVID-19 infections. Read more

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Reporting by Sruthi Shankar in Bangalore; Editing by Subhranshu Sahu

Our standards: Thomson Reuters Trust Principles.

Mary I. Bruner