European stocks kick off 2022 at record highs

The pan-European STOXX 600 index rose 0.6% to hit a record high of 490.76 points in morning trade, surpassing its November peak of 490.58. The benchmark recorded a 22.4% jump in 2021, its second-best yearly performance since 2009, as steady economic stimulus, earnings growth and vaccine rollouts made investors pour money into the stock markets.

European shares hit all-time highs on Monday, starting the year in an upbeat mood on hopes of steady economic recovery despite a surge in COVID-19 cases due to the Omicron variant. The pan-European STOXX 600 index rose 0.6% to hit a record high of 490.76 points in morning trade, surpassing its November peak of 490.58.

The benchmark recorded a 22.4% jump in 2021, its second-best yearly performance since 2009, as steady economic stimulus, earnings growth and vaccine rollouts made investors pour money into the stock markets. "Although COVID-19 variants permeated the global economy, 2021 was the year of records with many bourses closing at or near record highs, while inflows into equities surpassed their largest accumulation ever ($928 billion)," Sean Darby, global equity strategist at Jefferies, said.

"Peering into 2022, we expect volatility to rise." Stock exchanges in Germany, France, Italy and Spain were up between 0.6% and 1%, while London markets were closed.

Among sectors, automakers led morning gains with a 1.6% rise, following monthly sales reports from several global automakers. Banking stocks gained 0.8%, tracking a rise in euro zone government bond yields. They were the best performing European sector in 2021, as a surge in inflation pushed traders to price in faster monetary policy tightening, particularly in the United States.

Lufthansa jumped 4.9% after Citi upgraded the stock to "buy" from "sell", as it expects the German airlines to benefit from reopening of Asia routes, particularly China. Air France KLM gained 3.9% as the brokerage upgraded the stock to "neutral".

A survey showed factory activity in the euro zone remained resilient in December, as factories took advantage of supply chain issues easing and stocked up on raw materials at a record pace. While coronavirus cases saw a rapid increase in several parts of the world, investors were largely relieved following signs that the Omicron variant is milder than the Delta variant.

Italian truckmaker Iveco Group slipped 4.8% in its first day of trading on the Milan bourse following its spin-off from CNH Industrial.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)