European shares extended gains at midday on Tuesday as investors continued to punt on the new Omicron variant of the coronavirus not being as severe as first thought.
The pan-European Stoxx 600 index was up 1.92% with all major regional bourses following suit. In Asia, Chinese property stocks rose after Beijing which cut the amount of cash that banks must hold in reserve releasing about $188bn of funds in long-term liquidity.
In Germany, investor sentiment deteriorated in December amid Covid restrictions and supply issues, according to a survey released on Tuesday by the ZEW Center for European Economic Research in Mannheim.
The headline ZEW investor expectations index fell to 29.9 from 31.7 in November. Meanwhile, the current situation index declined to -7.4 in December from 12.5 the month before. This was the first time since June that the situation indicator has been in negative territory again.
However there was better news elsewhere as industrial output in Europe’s biggest economy rose 2.8% in October month on month, beating forecasts due to a rebound in auto production.
Global oil prices rose again, consolidating a nearly 5% rebound the day before.
“It looks as though oil could be setting itself up for a period of gains after six consecutive weeks in the red, following a rally on Wall Street last night with the Dow leading the charge,” said Victoria Scholar, head of investment at Interactive Investor.
“Encouraging developments around Omicron, Saudi Arabia lifting official selling prices, talks between the US and Iran breaking off last week and a push above key technical resistance hurdles have helped support the oil market.”
In equity news, Belgian pharmaceutical company Galapagos gained more than 6% in early trade.
Shares in Ferguson rose almost 5% as the plumbing and heating distributor said its expectations for annual results had increased after a surge in first-quarter profit.
Among individual stocks, British American Tobacco gained after backing its full-year forecast, driven by more people switching to its vaping and oral nicotine products.
UK polymer company Victrex fell 6%, handing back Monday’s gains on the back of its earnings report.
