European stocks hit month-highs on lower omicron fears

December 23, 2021

For Anisha Sircar and Shashank Nayar

Dec 23 (Reuters) – European stocks hit a month-long high on Thursday, led by gains in bank papers as signs that the impact of the omicron variant may be less severe than feared led to a increased appetite for risk that pushed up euro zone and US Treasury debt returns.

* The pan-European STOXX 600 Index gained 1% in its third session followed by gains, driven by bank and travel stocks, following a global rally in stock markets that was also helped by strong data from the US economy.

* Two labs said their vaccines protected against omicron, while UK data suggested it could cause proportionally fewer hospital cases than the delta coronavirus variant, although public health experts warned that the battle against COVID-19 was far from over.

* Researchers from the University of Edinburgh and Imperial College London reported evidence that the omicron variant was less severe than the delta.

* Yields on euro zone bonds rose for the fourth straight session and benchmark Treasury debt rose to two-week highs as a cautious return in risk appetite reduced the need to seek refuge, which helped boost bank stocks.

* The STOXX 600 would gain about 21% this year, slightly below a 26% gain on the S&P 500. It is just 1.5% from its all-time highs.

* AstraZeneca added to the positive sentiment after the company said a three-dose cycle of its COVID-19 vaccine was effective against omicron, citing data from an Oxford University laboratory study. (Report by Anisha Sircar and Shashank Nayar in Bengaluru, Edited in Spanish by Manuel Farías)