Banks and travel stocks power Europe’s Stoxx 600 to new peaks

European stocks extended their new year rally on Tuesday, led by economically sensitive banks and travel stocks on signs that the Omicron coronavirus variant might be less severe than initially feared.

Equity markets across the globe bounced for the second straight day of trading in 2022, with the World Health Organisation saying more evidence is emerging that the coronavirus variant is affecting the upper respiratory tract, causing milder symptoms than previous variants.

Dublin

It was a positive start to the year in Dublin with the Iseq index following other bourses higher. The Dublin market closed its first day of trading in 2022, up 2.5 per cent at 8661.82.

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Ryanair was the biggest gainer, up 8.85 per cent to €16.60 on positive sentiment to travel and hospitality stocks. Hotels group Dalata also put in a strong performance, closing 7 per cent higher at €3.99.

Banks were also in focus with Bank of Ireland up 6.3 per cent to €5.30 and AIB 4.4 per cent higher at €2.23.

Other movers in Dublin included housebuilders Cairn Homes and Glenveagh, which were up 3 per cent and 0.4 per cent respectively; CRH, up 3 per cent; and Smurfit Kappa, up 1.6 per cent. Kingspan fell into the red, however, closing down 3.3 per cent.

LONDON

Britain’s FTSE 100 rose on Tuesday in the first trading session of 2022, after its best annual gain in five years, following signs the Omicron Covid variant is less likely to derail the global economic recovery.

The blue-chip FTSE 100 gained 1.6 per cent, closing at its highest since February 2020, while the domestically-focused mid-cap index advanced 1.8 per cent in a catch-up rally after a long holiday weekend.

Financials led gains, with banking and life insurance stocks adding 4.8 per cent and 3.2 per cent respectively.

London-listed airline stocks soared, with Wizz Air, EasyJet and Aer Lingus and British Airways-owner IAG gaining between 7.5 per cent and 10 per cent, after Hungary-based Wizz reported strong load-factor data.

Europe

The pan-European Stoxx 600 index ended 0.8 per cent higher at 494.02 points, hitting a record high for a second consecutive session.

The European banks subindex jumped 3.3 per cent to November highs, and was the best performer for the day as government bond yields on both sides of the Atlantic got a boost from expectations of tighter monetary policy.

Europe's travel and leisure index jumped 3.5 per cent to its highest in more than six weeks.Stay-at-home stocks including food delivery companies Delivery Hero and Just Eat Takeaway. com fell between 7 per cent and 8 per cent, while major healthcare names also retreated.

New York

The Dow and the S&P 500 hit yet more record highs on Tuesday as worries about the Omicron variant of the coronavirus subsided and financial stocks gained, while Ford jumped on an upbeat forecast for electric pick-up production.

Nine of the 11 major S&P sectors advanced in early trading. Value-oriented and cyclicals such as energy and financials led the pack, up about 2 per cent each. The healthcare sector underperformed.

Travel stocks advanced, with the S&P 1500 airlines index rising 1.9 per cent and cruise operators Norwegian Cruise Line Holdings, Royal Caribbean and Carnival adding between 0.9 per cent and 2.1 per cent.

Big technology stocks that led gains in the previous session edged higher. Apple, Tesla, Meta and Alphabet rose between 0.1 per cent and 1.2 per cent.

The S&P 500 banks sector added 2.7 per cent, while the broader value index was up 0.7 per cent to hit a record high. – Additional reporting: Reuters