European Stocks Close Higher On China Reopening Optimism, Easing Rate Concerns

(RTTNews) - European stocks closed higher on Monday, extending recent gains, as optimism surrounding China's reopening and expectations of slower interest rate hikes by the U.S. Federal Reserve.

Markets continued to benefit from optimism about the outlook for U.S. interest rates following last Friday's weaker than expected reading on service sector activity.

Investors reacted positively to news that Hong Kong and mainland China resumed quarantine-free travel over the weekend. The move signals the end of zero-Covid policy which kept borders closed for almost three years.

Data showing Germany's industrial production recovering at a faster than expected pace in November, and a report showing an improvement in Eurozone investor confidence helped as well.

The pan European Stoxx 600 climbed 0.88%. The U.K.'s FTSE 100 gained 0.33%, Germany's DAX surged 1.25% and France's CAC ended higher by 0.68%, while Switzerland's SMI advanced 0.61%.

Among other markets in Europe, Belgium, Czech Republic, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland and Sweden ended with sharp to moderate gains.

Portugal and Russia posted modest gains. Turkiye declined sharply, while Austria, Denmark and Spain closed flat.

In the UK market, Antofagasta rallied 4.3%. Flutter Entertainment, Scottish Mortgage, Entain, IAG, Ocado Group, Glencore, Melrose Industries, Croda International, WPP, Segro and RS Group gained 2 to 4%.

Fresnillo, Airtel Africa, Beazley, BAE Systems, Frasers Group, Persimmon and Centrica lost 2 to 3.4%.

In Paris, STMicroElectronics surged 5.5%. Carrefour and Eurofins Scientific both gained nearly 5%.

Unibail Rodamco, Schneider Electric, L'Oreal, Engie, Legrand, WorldLine, Bouygues, Hermes International, Saint Gobain, Vinci, LVMH, Air Liquide, Veolia, Michelin, ArcelorMittal and Pernod Ricard gained 1 to 3%.

Renault, Thales, Societe Generale and Sanofi ended notably lower.

In the German market, Merck, Vonovia, Sartorius, Bayer, Infineon Technologies, Deutsche Post, SAP, HelloFresh, Siemens Healthineers and HeidelbergCement gained 2 to 3.5%.

Fresenius Medical Care drifted down 1.6%. Fresenius ended lower by about 1%, and E.ON ended 0.7% down.

Data from Destatis showed Germany industrial production recovered at a faster than expected pace in November, growing 0.2% from October, when output was down by revised 0.4%. Production was expected to gain 0.1%.

The business climate for self-employed individuals in Germany showed a considerable recovery at the end of the year as they were less pessimistic about the economic outlook, results of a survey conducted by the ifo Institute, in collaboration with Jimdo, showed on Monday.

Eurozone investor confidence rose to its highest level in seven months in January as investors anticipate a recession that is less severe than estimated previously, a survey by the behavioral research institute Sentix showed.

The investor sentiment index advanced to -17.5 in January from -21.0 in December, survey data from Sentix showed. This was the highest score since June 2022 and also better than economists' forecast of -18.0.

Euro area jobless rate remained unchanged at a record low in November despite the economy moving closer to a recession, official data revealed Monday. The jobless rate came in at 6.5%, as expected, unchanged from October, the statistical office Eurostat said. This was notably down from 7.1% in the same period last year.

According to the data released by the State Secretariat for Economic Affairs, or SECO, Switzerland's unemployment rate increased marginally in December and fell to the lowest level in more than two decades in the year 2022.

The unadjusted unemployment rate rose to 2.1% in December from 2% in November. In the corresponding month last year, the jobless rate was 2.6%.

The annual average unemployment rate dropped to 2.2% in 2022 from 3% in 2021.