Europe close: Travel and banking names pace gains, Technology unloved
By Alexander Bueso
Date: Tuesday 04 Jan 2022
(Sharecast News) - Travel and Leisure and banking stocks paced the advance in European equity markets on Tuesday, as investors punted on hopes that further curbs may not be needed to deal with the Omicron Covid variant.
Investor sentiment was boosted after the UK's vaccine minister said Britons hospitalised with Covid-19 in were broadly showing less severe symptoms than before.
Yet some analysts sounded a slightly skeptical note, with Oanda's Craig Erlam telling clients: "An interesting start to the year, with Europe once again posting large gains on Tuesday as the US indices have mixed fortunes.
"I always feel too much is read into late December and early January trading, with Santa rallies being overly celebrated and the doom and gloom of the opening month of the year way overdone. The start of the year hasn't offered the doom and gloom yet, although US tech stocks getting whacked today may make some a little nervous."
The pan-European Stoxx 600 index extended gains to trade up 0.82% to 494.02, hitting a fresh record along the way, helped in part by the US S&P 500 and Dow Jones Industrials indices whoch closed at all-time highs overnight.
The Stoxx 600's sector sub-index for Travel&Leisure jumped 3.47%, alongside a 3.27% rise for Banks, although Technology was unloved, with the corresponding sector sub-index slumping 1.45%.
Alongside, front month crude oil Brent traded up by 1.46% to $80.13 a barrel on the ICE, while benchmark 10-year German bunds and euro/dollar were little changed.
In France, Finance Minister Bruno Le Maire said although a spike in Omicron cases was disrupting some sectors, there was no risk of it "paralysing" the economy, and stuck to a forecast of 4% growth for France's GDP in 2022.
"Despite continually rising cases of Omicron, there is a growing belief that the variant is less deadly if more transmissible, particularly when coming up against the wall of triple-jabbed individuals," said Interactive Investor head of markets Richard Hunter.
In equity news, airlines Ryanair, British Airways and Iberia-owner IAG and Wizz Air all made large gains. Cruise line operator Carnival was up, along with holiday giant TUI.
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