EUROPEAN shares closed lower on Wednesday, weighed down by declines in energy stocks, while Britain’s FTSE 100 outpaced peers after a Christmas holiday as investors assessed Beijing’s steps towards reopening its Covid-battered economy. The region-wide Stoxx 600 dipped 0.1 per cent, while the FTSE 100 advanced 0.3 per cent as miners and China-exposed stocks jumped.

The UK market, which was closed for holidays since its half-day trading on Friday, is playing catch-up, analysts said. The FTSE 100 index has benefited this year from its exposure to commodities as prices of oil and base metals have rallied amid the Russia-Ukraine war. “The UK index could end the year in positive territory despite the broad pressures on global equity markets, weighed down by rising interest rates, inflation, and the threat of recession,” said Victoria Scholar, head of investment at Interactive Investor.

European miners added 0.6 per cent as copper prices rallied on hopes of a demand recovery in the world’s second-largest economy after China further eased its stringent Covid curbs on Monday. “There’s a bit more optimism about China as Beijing emerges from its ‘zero-Covid’ policy, though rising cases also suggest risk for China’s economy,” said Shawn Cruz, head trading strategist at TD Ameritrade.

“So far, the markets seem to be taking a ‘glass half-full’ approach to this news.”

Energy stocks fell 0.8 per cent, tracking lower oil prices. London-listed financials exposed to China such as insurer Prudential and HSBC added 0.6 per cent and 1.5 per cent, respectively. Meanwhile, the Stoxx 600 was headed for an annual loss of more than 12 per cent as concerns about an economic recession due to aggressive monetary policy tightening by central banks globally weighed on the European index.

The technology sector fell 0.9 per cent, tracking falls in US peers as rising yields pressured the interest rate sensitive shares, a recurring theme this year. Tech shares have fallen nearly 28.4 per cent so far in 2022. Germany’s Infineon fell 1.5 per cent amid broader tech moves and after chief executive Jochen Hanebeck said it is ready to spend several billion euros on the right takeover target as it searches for acquisitions. Traders and analysts said thin trading volumes also influenced market moves. Italy’s antitrust regulator said on Tuesday it had opened an inquiry into possible price-fixing for flights in and out of Sicily by airlines including Ryanair, Wizz Air and easyJet. Shares of the airlines fell between 1.2 per cent and 4 per cent. EasyJet denied any wrongdoing in a statement to Reuters. REUTERS

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