(Reuters) -European shares rose on Tuesday on hopes of a faster economic recovery, with some upbeat economic growth data and encouraging outlook on big names such as Airbus and LVMH putting a pan-regional index on course to erase last week’s hefty losses.
Europe’s STOXX 600 index closed higher for a second straight session, up 1.3% on broad-based gains after losing over 3% last week on concerns around the slow rollout of COVID-19 vaccines in the euro zone.
Preliminary data on Tuesday showed the euro zone economy contracted by less than expected in the fourth quarter of 2020 as large economies Germany and Spain still managed slight expansions.
“But with lockdowns extended well into the first quarter, another technical recession is in the making,” said Bert Colijn, senior euro zone economist at ING.
Luxury brand owners LVMH and Kering jumped 3.4% and 1% respectively after brokerage Berenberg recommended the stocks, noting long-term structural drivers of demand for luxury products remain intact.
Planemaker Airbus rose after a Morgan Stanley upgrade on overlooked production increases.
Anticipation of strong results from Amazon and Google-parent Alphabet and hopes of a $1.9 trillion U.S. COVID-19 relief package in the United States also kept sentiment buoyed.
Medical device maker Coloplast and Sweden’s Indutrade were the top gainers on STOXX 600 on topping quarterly earnings.
Basic materials was the only in the red as copper and iron ore prices tanked, while gains in the oil sector were limited by a 4.5% slide in BP after it reported its first loss in a decade. [IRONORE/] [MET/L]
London’s blue-chip FTSE 100 gained the least among regional peers, weighed upon by reports that the UK variant of the coronavirus has developed a new, concerning mutation that could reduce the efficacy of vaccines. [.L]
Fresenius Medical Care tumbled 10.3% after the world’s No.1 kidney dialysis firm warned its adjusted net profit was likely to drop this year.
RETAIL FRENZY PAUSES
Silver prices dropped on Tuesday, halting a rally to near eight-year highs in the previous session that was the latest move in two weeks of turmoil on financial markets fuelled by a pack of Reddit-centered individual investors.
A pause in a social media driven rally that drove up prices of the commodity as well as certain stocks including GameStop Corp has helped calm worries about potential losses incurred by certain hedge funds causing disruption to markets as a whole.
Finnish shares of Nokia, also caught up in the frenzy, slid 5.3%.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Catherine Evans)