European Stocks Higher; Strong Economic Data Breeds Optimism

European stock markets traded higher Tuesday helped by strong economic data, suggesting the region may be weathering the hit from the Omicron variant more strongly than when the Covid-19 virus first hit.

At 3:45 AM ET (0845 GMT), the DAX in Germany traded 0.9% higher, the CAC 40 in France climbed 0.8% and the U.K.’s FTSE 100 rose 0.3%.

U.K. retail sales jumped in December, growing 4.6% compared with December 2019, the British Retail Consortium said Tuesday. Another report from Barclaycard showed consumer spending was up 12.2% last month from two years before.

Adding to the positive news, Spanish industrial production rose 4.8% in November, a sharp improvement from the revised drop of 0.7% the previous month.

That said, the spread of the Omicron variant of the Covid-19 virus shows few signs of slowing down globally, with the United States reporting 1.35 million new coronavirus infections on Monday, according to a Reuters tally, the highest daily total for any country in the world. China meanwhile locked down Anyang, a city of some 5 million inhabitants, after discovering local transmission of the Omicron variant, adding to restrictions in place at Xi’an and Tianjin, the world’s fourth-largest port.

On the brighter side, a number of European governments are now relaxing Covid-19 rules to keep hospitals, schools and emergency services going, an acknowledgement that the Omicron variant is less dangerous than previous dominant strains.

In corporate news, Volkswagen (DE:VOWG_p) stock fell 0.6% after the German auto giant blamed supply chain constraints for missing its ID electric vehicles sales target in China last year.

Deutsche Bank (DE:DBKGn) stock fell 1.7% and Commerzbank (DE:CBKG) stock dropped 2.7% after Cerberus Capital Management announced plans to sell stakes in the German banks, with the private equity company scaling back an investment that hasn’t worked out over the last four years. The DAX’s biggest gainer was Delivery Hero (DE:DHER) stock, which recovered 5% after saying it expected its delivery business to break even in the second half of this year.

Sika (SIX:SIKA) stock rose 3.9% after the construction chemicals maker posted its highest ever annual sales figure in 2021, while Marks & Spencer (OTC:MAKSY) stock climbed 2.3% after data from NielsenIQ showed the company was Britain’s fastest growing food retailer in the key Christmas quarter.

ASML (AS:ASML) stock rose 1.5% with the semiconductor still in demand despite saying that some of its systems remained offline after last week’s fire at its Berlin factory.

Oil prices edged higher after two days of losses with the globe’s major suppliers continuing to struggle to increase output to match recovering demand.

The market is waiting on U.S. oil and product inventory data from the American Petroleum Institute, an industry group, later Tuesday, followed by data from the U.S. Energy Information Administration on Wednesday.

By 3:45 AM ET, U.S. crude futures traded 1.1% higher at $79.08 a barrel, while the Brent contract rose 1% to $81.64.

Additionally, gold futures rose 0.6% to $1,809.80/oz, while EUR/USD traded 0.2% higher at 1.1348.