European shares rebound as vaccine reassurances lift sentiment

Telecoms stocks lead gains

  

European shares ticked up on Thursday as positive comments from vaccine makers allayed some fears around the Omicron variant of the coronavirus, while Deutsche Bank slipped after a report that it might have violated a criminal settlement.

The pan-European STOXX 600 rose 0.2% after a mid-week wobble in the previous session on concerns about fresh restrictions in Britain.

"The market is assuming it is just a question of 'how quickly can we rollout booster jabs' rather than going back to square one," said Michael Bell, global market strategist at JPMorgan Asset Management.

BioNTech and Pfizer said on Wednesday a three-shot course of their vaccine could neutralise the variant. Other preliminary data has suggested that Omicron is less dangerous than initially feared. 

Bell forecast a positive outlook for European equities next year even if policy tightens, saying, even "if interest rates go up, most people are not really going to feel it at least over the next year or two, as it is not going to slow down economies very much."

European bourses have seen wild intraday swings on worries the newly discovered variant could dent global economic recovery as governments ramp up measures to slow its spread. Still, the STOXX 600 is set to log its biggest weekly gain since March, if gains hold.

Investors' focus is on U.S. consumer price inflation data due Friday and a series of central bank meetings next week, including of the European Central Bank, for cues on the path of monetary policy.

Deutsche Bank dropped 2.3% after the Wall Street Journal reported the U.S. Justice Department said the bank failed to tell prosecutors about an internal complaint in its asset-management arm's sustainable investing business. 

Meanwhile, UniCredit surged 7.5% to the top of Italy's blue-chip FTSE MIB after the company said it aimed to increase its net profit on average by 10% a year through to 2024. 

French waste and water management company Veolia offered the biggest boost to utility stocks after sources said it was set to secure EU antitrust approval along with Suez for their 13 billion euro tie-up. 

Telecoms stocks led by BT Group, were the biggest winners on the index, while oil stocks  fell 1%. 

Utility firm EDF sank 3.7% after a trader pointed to a media report on a French government plan to limit the impact of rising electricity prices.

(Reporting by Anisha Sircar in Bengaluru; Editing by Subhranshu Sahu and Amy Caren Daniel) ((Anisha.Sircar@thomsonreuters.com;))


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