Europe close: Indices mostly higher with cyclicals in the lead
By Alexander Bueso
Date: Wednesday 05 Jan 2022
(Sharecast News) - European shares extended gains on Wednesday despite economic growth in the eurozone easing to a nine-month low in December as Covid-19 took its toll.
"The continued outperformance of sectors such as mining, banks and oil points towards a resurgence of the 'rebound trade' for those stocks poised to benefit from an improving global economy and the expected rise in yields and interest rates around the globe, a theme supported by today's solid ADP report, which itself has prepared investors for a decent NFP number on Friday," was IG chief market analyst Chris Beauchamp's take on matters.
The pan-regional Stoxx 600 index was up 0.07% to 494.35, as investors eyed higher US Treasury yields and a much stronger-than-expected reading on consultancy ADP's US private sector payrolls report for December.
The Stoxx 600's gauge of Technology names gave back 0.48%, offset by a 0.23% advance for Banks, a 0.65% gain for Travel and Leisure and a 1.63% jump for Basic Resources.
European shares extended gains on Wednesday despite economic growth in the eurozone easing to a nine-month low in December as Covid-19 took its toll.
Euro/dollar and Brent crude oil were higher but benchmark 10-year Bund yields were basically flat.
IHS Markit's final eurozone composite output index fell to 53.3 from 55.4 in November and versus a 'flash' estimate of 53.4.
The final services business activity index printed at 53.1 in December, down from 55.9 the month before and a flash reading of 53.3.
In equity news online supermarket Ocado topped the Stoxx 600 throughout much of the session after an upgrade to 'buy' from 'hold' at Berenberg and news from market research firm Kantar that it was the only internet grocer to grow its sales year-on-year over the key Christmas period.
Shares in Ocado's joint venture partner Marks & Spencer were also higher.
Nevertheless, by the end of trading had been overtaken by shares of Carrefour after Bloomberg reported that French rival Auchan was mulling a fresh bid.
Dutch tech investor Prosus, which has a stake in China's Tencent, fell after a market regulator fined units of several Chinese tech firms for failing to properly report around 12 deals.
Shares in automaker Stellantis jumped on news that its Chrysler brand was planning to shift to an all-electric lineup by 2028 and introduce new products, while German carmaker BMW gained as it achieved record sales of more than 2.2 million vehicles from its BMW marque in 2021.
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