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Defensive stocks, 'Santa Rally' prop up European shares


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Defensive stocks, 'Santa Rally' prop up European shares

Reuters.pngStock MarketsDec 28, 2021 
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By Anisha Sircar

(Reuters) - European shares edged up to a five-week high on Tuesday, taking heart from Wall Street hitting record highs overnight, even as Omicron worries remained with France tightening curbs and COVID-19 cases surging in Spain and Britain.

The pan-European STOXX 600 rose 0.6%, after adding 0.6% in its previous session, to notch a more than one-month high.

Risk appetite remains strong into the year-end, according to analysts, despite the threat of the Omicron coronavirus variant hampering a global economy already tackling slowing growth, supply bottlenecks and soaring prices.

The STOXX 600 is eyeing its second straight session of gains in the final week of 2021 after adding 2.6% in December so far, on track for its best month since August.

"Given rich valuations after an enthused, if not euphoric, bull run in 2021, it is not unreasonable to propose that this Santa Rally is clearing a higher bar," said Vishnu Varathan, head of economics and strategy at Mizuho Bank.

Defensive stocks including healthcare and industrials led gains, with almost all sectors trading in positive territory.

Healthcare stocks rose 0.8% to their highest in nearly three months, and were eyeing their biggest two-day gain in more than a week. The sector has added 25% this year, outperforming the benchmark's 22% so far.

Spain's coronavirus infection rate exceeded 1,000 cases per 100,000 people for the first time on Monday, stoked by the fast-spreading Omicron variant.

While England will not get any new COVID-19 restrictions before the end of 2021, the French government said it would tighten measures, though there will be no curfew for New Year's Eve. The blue-chip CAC 40 rose 0.6% in early trade.

The rapid rise of Omicron cases could dampen, if not derail, central banks' plan for policy tightening into the next year, Varathan added.

Shares of Italy's Alerion Clean Energy advanced 4.4% on reports its controlling family could sell a stake of up to 43% in the renewable energy operator in a deal worth around 800 million euros.

 

Swiss specialty chemicals maker Clariant said it will purchase assets from German competitor BASF in North America in a $60 million deal that will help grow its sustainable business. BASF and Clariant shares rose 1.0% and 0.6% respectively.

Telecom Italia (MI:TLIT) climbed 0.6% after an Italian ministry said it would use a proposal presented by a consortium that includes the company as a blueprint in the national cloud tender it plans to launch in the first weeks of 2022.

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2 hours ago, Kodiak said:

"The first indicator to register a reading in January is the Santa Claus Rally created by Yale Hirsch in 1972. The seven-trading day period begins today December 27 and ends with the close of trading on January 4. "

https://jeffhirsch.tumblr.com/

Hi @Kodiak

Thanks for sharing!

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U.S. stock indexes rose Monday as markets reopened after the Christmas holiday and investors assessed the spread of the omicron Covid-19 variant.

The S&P 500 gained nearly 1.4% to close at 4,791.19, marking its 69th record close of the year. The index also hit an intraday record for the first time in more than a month. The Dow Jones Industrial Average added 351.82 points, or roughly 1%, at 36,302.38. The Nasdaq Composite ticked up about 1.4% to 15,871.26.

 

Market strategists remained positive on the overall equity outlook amid a surge in Covid cases. New studies suggest the omicron strain has a lower risk of hospitalization than other Covid variants.

https://www.cnbc.com/2021/12/27/us-futures-point-to-mixed-open-as-investors-assess-omicron-variant.html

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Santa Claus rally is off to best start in 20 years. Here’s what history says about the stock market’s performance when rally starts this well. Mark DeCambre

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The so-called Santa Claus rally that tends to materialize in the U.S. stock market in the final week of December and the first two trading sessions of the new year, is off to its best start since 2000-01, when the market gained 5.7% over the period, according to Dow Jones Market Data.

In fact, in the eight occasions since 1929 when the index has gained at least 1% to start that seven-session trading period near the end of year, the Santa Claus rally has produced a gain 100% of the time, with an average gain of 3.3%.

On Monday, the S&P 500 closed in record territory, up around 1.4%, with the session technically marking the start of the seasonal period referred to as a Santa Claus rally; when gains hold up, the stock market tends to perform well, the data show.

The upbeat mood to start the final week of trading in 2021 was helping to lift the Dow Jones Industrial Average and the Nasdaq Composite Index with even higher-risk assets such as bitcoin being driven upward to start the week. msn.com

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