Defensive stocks, 'Santa Rally' prop up European shares

Defensive stocks prop up European shares
Defensive stocks prop up European shares   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Anisha Sircar</p> <p> – European shares edged up to a five-week high on Tuesday, taking heart from Wall Street hitting record highs overnight, even as Omicron worries remained with France tightening curbs and <span class="caps">COVID</span>-19 cases surging in Spain and Britain.</p> <p>The pan-European <span class="caps">STOXX</span> 600 rose 0.6%, after adding 0.6% in its previous session, to notch a more than one-month high.</p> <p>Risk appetite remains strong into the year-end, according to analysts, despite the threat of the Omicron coronavirus variant hampering a global economy already tackling slowing growth, supply bottlenecks and soaring prices.</p> <p>The <span class="caps">STOXX</span> 600 is eyeing its second straight session of gains in the final week of 2021 after adding 2.6% in December so far, on track for its best month since August.</p> <p>“Given rich valuations after an enthused, if not euphoric, bull run in 2021, it is not unreasonable to propose that this Santa Rally is clearing a higher bar,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank.</p> <p>Defensive stocks including healthcare and industrials led gains, with almost all sectors trading in positive territory.</p> <p>Healthcare stocks rose 0.8% to their highest in nearly three months, and were eyeing their biggest two-day gain in more than a week. The sector has added 25% this year, outperforming the benchmark’s 22% so far.</p> <p>Spain’s coronavirus infection rate exceeded 1,000 cases per 100,000 people for the first time on Monday, stoked by the fast-spreading Omicron variant.</p> <p>While England will not get any new <span class="caps">COVID</span>-19 restrictions before the end of 2021, the French government said it would tighten measures, though there will be no curfew for New Year’s Eve. The blue-chip <span class="caps">CAC</span> 40 rose 0.6% in early trade.</p> <p>The rapid rise of Omicron cases could dampen, if not derail, central banks’ plan for policy tightening into the next year, Varathan added.</p> <p>Shares of Italy’s Alerion Clean Energy advanced 4.4% on reports its controlling family could sell a stake of up to 43% in the renewable energy operator in a deal worth around 800 million euros.</p> <p>Swiss specialty chemicals maker Clariant said it will purchase assets from German competitor <span class="caps">BASF</span> in North America in a $60 million deal that will help grow its sustainable business. <span class="caps">BASF</span> and Clariant shares rose 1.0% and 0.6% respectively.</p> <p>Telecom Italia climbed 0.6% after an Italian ministry said it would use a proposal presented by a consortium that includes the company as a blueprint in the national cloud tender it plans to launch in the first weeks of 2022.</p> <p/> </div>