European stocks end lower as tech and luxury stocks lose ground

  • Nestlé hits record
  • HelloFresh tumbles after weak forecasts
  • Travel stocks increase thanks to news of Pfizer-BioNTech vaccine

December 8 (Reuters) – European stocks closed a volatile session lower on Wednesday after marking their biggest two-day gain in more than a year, with tech and luxury stocks reversing strong gains as investors oppose vaccine insurance with COVID-19 restrictions.

After jumping 3.8% in the past two days, the STOXX 600 regional index (.STOXX) closed 0.6% lower.

While defensive buying supported it in morning trading, concerns about the effectiveness of existing vaccines against the Omicron COVID-19 variant and the possibility of tighter restrictions this week in Britain weighed on sentiment. Read more

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The clue got some respite when BioNTech and Pfizer (PFE.N) said that a three-shot treatment of their COVID-19 vaccine was able to neutralize the Omicron variant in a lab test. Read more

That pushed up travel and leisure stocks (.SXTP), with online games company Evolution (EVOG.ST) jumping 7.3%, cruise line Carnival (CCL.L) adding 4% and the company from holidays TUI (TUIGn.DE), increasing by 2%, even though it posted an annual operating loss of more than 2 billion euros. Read more

U.S. investment bank JP Morgan predicted on Wednesday that 2022 will mark the end of the pandemic and see a full global economic recovery. Read more

“European stocks are in an ideal situation,” State Street Global Advisors said in a note on the 2022 outlook.

“European stocks offer attractive valuations relative to their US counterparts … (and) present the most solid earnings and growth expectations in developed markets. “

Healthcare stocks (.SXDP), among those seen as more stable in times of economic uncertainty, also rose.

However, chipmakers ASML (ASML.AS) and Infineon (IFXGn.DE) and luxury stocks LVMH, owner of Louis Vuitton (LVMH.PA), Hermes (HRMS.PA) and Kering, parent company of Gucci ( PRTP.PA), fell between 1.4% and 4.6%, weighing the most on the STOXX 600.

A recent rally saw the STOXX 600 recover all losses caused by the detection of the Omicron variant on November 26, with the index now only 3% below its all-time high.

U.S. inflation data on Friday and a series of major central bank meetings next week could set the tone for financial markets, as investors try to determine when policymakers begin to withdraw stimulus from the pandemic era.

Shares of Nestlé SA (NESN.S) rose 1.6% to an all-time high, propelling the Swiss index (.SSMI) to new highs, after the company reduced its stake in French giant from L’Oréal beauty (OREP.PA). Read more

Volkswagen (VOWG_p.DE) lost 0.3% after saying limited supply of chips would continue to pose problems for Europe’s largest automaker for at least the first half of 2022. read more

Meal kit company Hellofresh (HFGG.DE) fell 10.9% after disappointing earnings prospects for 2022, while chemicals and recycling company Umicore (UMI.BR) fell 9% after trading lowered its outlook for the second time in three months. Read more

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Reporting by Sruthi Shankar in Bangalore; Edited by Uttaresh.V, Devika Syamnath and Ramakrishnan M.

Our Standards: Thomson Reuters Trust Principles.

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