Following China’s further relaxation of its COVID-19 restraints, which raised expectations of a revival in the world’s second-largest economy, European markets rose on Tuesday, tracking a global surge in stocks. The STOXX 600 index for all of Europe (.STOXX) increased by 0.4% to start the week with fewer trading days higher. China announced on Monday that it would eliminate the three-year quarantine period for foreign visitors, significantly relaxing border procedures to combat COVID.
Most European bourses rose in early trading despite London and Dublin’s markets being closed for the Christmas holiday.
According to Ipek Ozkardeskaya, senior analyst at Swissquote Bank, Friday’s in-line U.S. inflation figures and China’s reopening could give the stock market a “small boost.”
The increase of COVID-19 cases in China, however, “may cast a shade over the reopening shine,” Ozkardeskaya noted.
Luxury companies LVMH (LVMH.PA) and Richemont (CFR.S) that are exposed to China both increased by almost 1.7%.
According to Refinitiv statistics based on Thursday’s closing price, mining (.SXPP) and energy (.SXEP) stocks increased 1.0% and 1.4%, respectively, as commodities prices soared on expectations of a revival in demand in top consumer China. These industries also increased on the day.
The broader European index was helped by gains in industrials (.SXNP) and banks (.SX7P) for the second consecutive session.
Despite challenges from the energy crisis, a lack of raw materials, and a sluggish global economy, German companies anticipate just a slight recession in 2013, according to a Reuters study.
Europe’s largest economy, Germany, saw a 0.5% increase in stock prices (.GDAXI)
As a result of aggressive monetary policy tightening by central banks throughout the world, the European STOXX 600 index has lost about 12% of its value so far this year and is on pace to have its worst yearly performance since 2018.
One company that moved significantly was Leonteq (LEON.S), which dropped 4.4% after the Swiss fintech company said it was decreasing its profit forecasts for 2022 owing to weaker client demand in the second half of the year.
Lotus Bakeries NV (LOTB.BR), a Belgian company, dropped 4.6% and finished at the bottom of the index.