The DAX chart of the German stock index is pictured on the stock exchange in Frankfurt, Germany on December 22, 2021. REUTERS / Staff
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December 23 (Reuters) – European stocks hit a month-long high on Thursday, driven by gains in bank stocks as signs that the impact of the Omicron variant may be less severe than expected led to better palatability for the risk that drove Eurozone and Treasury yields higher.
The pan-European STOXX 600 (.STOXX) gained 1%, marking the third straight session of gains, boosted by banking (.SX7P) and travel (.SXTP) stocks, following a global rally in stocks that was also helped by the economic strength of the United States. The data.
Two vaccine makers said their shots were safe from Omicron, as UK data suggested it could cause proportionally fewer hospital cases than the Delta coronavirus variant, although public health experts have warned that the battle against COVID -19 was far from over. Read more
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Researchers at the University of Edinburgh and Imperial College London have reported evidence that the Omicron variant is less severe than the Delta coronavirus variant.
“The Omicron wave will not derail the economic recovery which is well underway, it could delay it, but 2022 will have an attractive and healthy economic environment,” said Philip Petursson, chief investment strategist at IG Wealth Management.
European government bond yields rose for the fourth session in a row and benchmark US Treasury yields hit two-week highs as the return of risk sentiment in the market reduced the need for safe-haven debt, helping to push bank stocks higher.
The STOXX 600 is expected to gain around 21% this year, slightly underperforming a 26% gain from the S&P 500 and is only 1.5% off its record highs.
âThis year the economies reopened after the 2020 lockdowns and benefited from all fiscal stimulus. 2022 will be the path to normalization of equity returns, interest rates and economic growth,â said Petursson.
AstraZeneca (AZN.L) added to the positive sentiment after the drugmaker said that a three-dose treatment of its COVID-19 vaccine was effective against the Omicron variant, citing data from a lab study from the ‘University of Oxford. Read more
Swiss building materials company Holcim (HOLN.S) gained 1.9% after announcing it would buy Malarkey Roofing Products for $ 1.35 billion in order to expand into the growing US roofing market residential. Read more
Flutter Entertainment (FLTRF.L) rose 2.1% after announcing it would buy Italian online games operator Sisal for 1.62 billion pounds ($ 2.16 billion), while the group of online betting seeks to expand its presence in Europe. Read more
Continental AG (CONG.DE) added 2.5% after its CEO told a magazine that the German automotive supplier could hit the upper limit of its profit margin outlook in 2021 as vehicle production resumed in fourth trimester.
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Reporting by Anisha Sircar and Shashank Nayar in Bangalore; Editing by Shounak Dasgupta and Barbara Lewis
Our Standards: Thomson Reuters Trust Principles.