Title: European shares start December on a high as pandemic-sensitive sectors recover

Dec 01, 2021 05:16AM ET

By: AnalysisWatch

European stocks rose on Wednesday as deal trackers returned after an unpleasant November and areas like travel, oil and mining, battered by fears over the Omicron Covid variation influencing monetary movement, got a lift.

The pan-European STOXX 600 rose 0.8% in morning trade, tracking gains in Asian stocks and US futures after a sharp sell-off in the previous session.

The STOXX 600 fluctuated between strong gains and losses this week as uncertainty surrounding Omicron led to volatile trading. The index ended November with a loss of 2.6% after Federal Reserve Chairman Jerome Powell hinted on Tuesday that the central bank may accelerate the pace of reducing its bond purchases a few months earlier than expected.

According to a survey, manufacturing growth in the eurozone accelerated slightly last month, but supply chain bottlenecks have worsened.

Still, a recovery in corporate profits is expected to drive European equities to new record highs in 2022, according to a Reuter's survey.

The survey of 23 fund managers, strategists, and brokers predicts that Germany's DAX and France's CAC 40 index will reach new highs by mid-2022, while the STOXX 600 will gain 7% to reach 500 points by July.

The European Union could give the green light to COVID-19 vaccines tailored to the new variant in three to four months, Emer Cooke, the head of the regional medicine agency, said on Tuesday, adding that existing vaccines would continue to provide protection.

Mining stocks rose 2.9 percent after copper prices rebounded on easing concerns about the Omicron coronavirus, while oil shares gained 2.4 percent as crude prices rose ahead of an OPEC meeting.