European stocks move towards their highest in more than a week
Diminishing Omicron COVID19 variant concern and a welltimed booster shot of Chinese stimulus led world stock markets and oil higher on Tuesday and left traders abandoning safe-haven currencies and bonds again.
European stocks moved up to their highest in more than a week, supported by a strong rally in technology shares as concerns about the Omicron coronavirus variant faded, and gains in mining sector after China eased its monetary policy.
The continent-wide STOXX 600 index rose 1.8% to reach the levels achieved before the 26 November, when the index endured its biggest selloff this year on concerns about the new virus variant.
Technology stocks gained 3.9% after reaching sevenweek lows on Monday amid a wider selloff in high-growth names.
The STOXX 600 is now hanging around 5% below its record high from mid-November, while the Euro STOXX 50 volatility index, Europe’s fear gauge, dropped to 25.6. At the peak of the selloff in markets, it hit 33.1.
Mining stocks rose 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.
Among individual stocks, British American Tobacco rose 2% after supporting its fullyear forecast, sustained by more people turning to the tobacco giant’s vaping and oral nicotine products.
Telecom Italia rose 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.
Defensive sectors such as utilities, telecoms and food & beverages were among the smallest gainers.
Oil prices increased by another 2% to $74.60 a barrel, adding to a near 5% rebound the day before as worries about the impact of Omicron on global fuel demand decreased.
Copper prices also moved higher while gold was stable at $1,778.5 per ounce on expectations U.S. consumer price data due later this week will show inflation quickening.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.