Europe: Tech, auto help shares to best gains in over a year

[BENGALURU] European stocks jumped 2.5 per cent on Tuesday, boosted by a strong rebound in technology shares as worries somewhat eased over the Omicron coronavirus variant, while German shares surged close to 3 per cent led by automakers.

The continent-wide Stoxx 600 index logged its best session since last November, bouncing back to levels before worries emerged about the new virus variant.

"Last week's sellers have been rudely pushed out of the way in a mad scramble to get back into equities now that Omicron fears are receding almost as fast as they appeared. Billions have been 'wiped on' to share prices since Friday's lows, December living up to its reputation as one of the strongest months for equities," said Chris Beauchamp, chief market analyst at IG.

Technology stocks surged 5.6 per cent after hitting seven-week lows on Monday, while miners jumped as copper and iron ore prices were lifted by biggest consumer China easing its monetary policy.

"There's relief that although global fiscal policy is set to tighten over the next six months, it's not going to be within the next month," said AJ Bell financial analyst Danni Hewson.

The Stoxx 600 is just about 2 per cent below its record high from mid-November, while the Euro Stoxx 50 volatility index, Europe's fear gauge, fell to 14.87. At the peak of the selloff in markets, it hit 33.1.

Luxury stocks were among the biggest boosts, lifting France's CAC 40 2.9 per cent, while Porsche and Volkswagen led auto stocks higher.

The carmakers jumped over 8 per cent each after a report that the Porsche and Piech families, who control Volkswagen's largest shareholder, are considering selling part of their VW stake and using the proceeds to buy a substantial number of shares in Porsche.

Carmaker Stellantis advanced 3.6 per cent on plans to generate around 4 billion euros (S$6.2 billion) by 2026 and about 20 billion euros by 2030 from software offerings.

Among individual stocks, British American Tobacco gained 1.0 per cent after backing its full-year forecast, buoyed by more people switching to the tobacco giant's vaping and oral nicotine products.

Defensive sectors such as healthcare and food & beverages were among decliners on Stoxx 600.

REUTERS