Markets steady on Europe’s last full trading day

The pan-European Stoxx 600 rose 0.2 per cent

European shares inched higher on Thursday on hopes fresh coronavirus-related curbs and restrictions may not be needed going into the new year, even as a surge in Covid-19 cases due to the Omicron variant kept a lid on gains. The pan-European Stoxx 600 rose 0.2 per cent, after edging 0.1 per cent lower on Wednesday, with the tech sector and defensives, including healthcare and real estate , in the lead.

Spain's Ibex was flat after flash data showed consumer prices in December rose 6.7 per cent across the country from the same month last year, the fastest annual pace of inflation since 1989. The index has underperformed its regional peers in 2021, gaining a slim 7 per cent, compared with the Stoxx 600's 22 per cent rise. Meanwhile, France's CAC 40 has eclipsed the benchmark's gains in 2021, as hopes of an economic recovery saw luxury stocks shine, even though outlook for demand from Asia remains bleak into the new year. The blue-chip index surged 29 per cent in 2021, eyeing its best year in over two decades, beating even the S&P 500's 27 per cent rally.

"The CAC 40 has a higher concentration of value stocks, which were all hammered in 2020 at the expense of pharma and tech, or growth sectors," said Jeffrey Halley, senior market analyst at Oanda. "The recovery, particularly in the second half of 2021, has flowed through to value sectors. In a rising interest rate and inflation environment, value should outperform," Mr Halley added.

Global Covid-19 infections hit a record high over the past seven-day period, Reuters data showed on Wednesday, as countries try to balance Omicron restrictions while keeping economies open.

British prime minister Boris Johnson said earlier this week he would not bring in new pandemic-related restrictions this year, while a curfew has been ruled out in mainland France. Researchers said on Thursday a booster dose of Johnson & Johnson's Covid-19 vaccine was 84 per cent effective at preventing hospitalisation in South African healthcare workers who became infected as Omicron spread.

Credit Suisse dropped 0.5 per cent after a preliminary probe found its chairman attended the Wimbledon tennis finals in July during a visit to Britain when the country's Covid-19 rules required him to be in quarantine. Several European markets including Italy, Germany and Spain will be closed on Friday, while Paris and London will trade for half a session, ahead of the New Year. - Reuters