European stocks edge slightly higher on hopes of economic recovery
Germany’s DAX and London’s blue-chip index rose 0.2 per cent
European stocks edged slightly higher on Tuesday but the prospect of further lockdowns kept investors on their toes.
The pan-European Stoxx 600 index rose just 0.1 per cent by 0938 GMT, while Germany’s DAX and London’s blue-chip index rose 0.2 per cent each.
However, the chance of longer lockdowns in Europe had investors on edge, with German Chancellor Angela Merkel extending a lockdown in Germany for most shops and schools until mid-February.
Defensive sectors such as healthcare, telecoms and utilities gained the most, while retail stocks took the biggest hit. Health care and tech stocks each added 0.8 per cent while the retail sector dropped 1.5 per cent.
UK-listed shares of Rio Tinto were flat despite reporting a 2.4 per cent rise in fourth-quarter iron ore shipments.
Swiss chocolate maker Lindt & Spruengli fell 2.2 per cent after it said organic sales fell 6.1 per cent in 2020, with only a little improvement in the second half due to Covid-19 and travel restrictions.
Refinitiv IBES analysts are forecasting a 26.3 per cent decline in fourth-quarter profit for companies listed on the Stoxx 600.
Meanwhile, oil prices rose on optimism that government stimulus will slowly lift global economic growth.
Brent crude futures for March rose 72 cents to $55.47 a barrel by 1152 GMT after falling 35 cents in the previous session.
US West Texas Intermediate crude was up 29 cents, to $52.65 a barrel.
Additionally, the International Energy Agency cut its outlook for oil demand in 2021, but signalled a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.
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