(Bloomberg) — European equities climbed for a third day as the latest coronavirus studies fueled optimism that economic growth can withstand omicron risks.
The Stoxx Europe 600 rose 0.9% as of 2:31 p.m. in London, hitting a two-week high. Travel & leisure and bank shares were among the top gainers.
The omicron variant appears less likely to lead to hospitalizations than the delta strain, according to preliminary data from studies. Pills to treat Covid-19 from Pfizer Inc. and Merck & Co. gained clearance for emergency use in the U.S., delivering a more convenient treatment option for at-risk patients at a critical point in the pandemic. Also, AstraZeneca Plc said its booster shot significantly increased levels of antibodies against omicron.
Incremental news on omicron is not getting worse, the approval of the Pfizer pill is helpful, and the European Central Bank is prepared to remain dovish, “supporting growth prospects and sentiment for European stocks,” said Esty Dwek, chief investment officer at Flowbank SA. “The Santa rally might have been delayed, but it should still happen.”
European stocks have been rising in recent days after coming under pressure as the omicron variant led to new restrictions and amid a hawkish shift in central bank policies. However, many major asset managers continue to favor stocks and see them as the best vehicle for returns as bond yields remain low.
While stocks have been eking out gains in recent days, volumes are getting thinner ahead of the holidays.
“I would classify this bounce as a relief rally, but it’s not sustainable yet,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “I would not buy here and wait for some further news and studies on omicron, Biden’s fiscal plan.”
Biden Sees Path for Economic Plan Despite Manchin Rebuff
Among individual movers, Flutter Entertainment rose after striking a deal to buy Italian gambling operator Sisal in a $2.2 billion transaction. Prosus NV climbed in Amsterdam, mirroring gains in Tencent Holdings Ltd. after it declared a special dividend by handing out $16 billion of JD.com Inc. shares. And Koninklijke Philips NV jumped after company provided an update on ventilators that were recalled due to health concerns.
- For a daily wrap highlighting the biggest movers among EMEA stocks, click here
- You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance.
More stories like this are available on bloomberg.com
©2021 Bloomberg L.P.
