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Big euro zone inflation drop spurs hopes for smaller ECB
Argenx jumps on deal to buy U.S. FDA priority review
STOXX 600 gains 6.8% in November
Telecom Italia falls as govt aide says full takeover a
Nov 30 (Reuters) -
The STOXX 600 index closed higher on Wednesday and
registered its second straight month of gains on hopes of easing
COVID curbs in China and after cooler euro zone inflation data
bolstered case for smaller rate hikes by the European Central
The pan-European index rose 0.6% to end November
with a 6.8% gain, its best monthly performance since July.
China-exposed luxury stocks were among the biggest
boosts to the STOXX 600 on Wednesday, followed by auto
and commodity, stocks.
The giant Chinese cities of Guangzhou and Chongqing
announced an easing of COVID curbs on Wednesday after a string
of protests against the world's toughest coronavirus
restrictions. But with record numbers of cases nationwide, there
seems little prospect of a major U-turn in "zero-COVID" policy.
"Optimism about China reopening is really starting to filter
through," said Giles Coghlan, chief market analyst at HYCM.
Meanwhile, data showed consumer prices in the euro zone grew
10% in November, well below expectations for 10.4% and after a
10.6% increase in October, prompting traders to raise their bets
to 57% for a 50 basis point rate hike by the ECB in December.
The report came amid mixed signals from policymakers
recently about the pace and path of future increase in borrowing
"Euro zone inflation is following that of the U.S. in
making some tentative declines from peak levels. It would be
foolish to be complacent about the risks of inflation taking a
new leg higher," said David Goebel, associate director of
investment strategy, Evelyn Partners.
"Nonetheless, these latest readings will give consumers
and investors some hope that the worst of this inflationary
episode could be in the rear-view mirror."
The benchmark STOXX 600 has climbed nearly 15% from its
September closing lows on hopes that the Federal Reserve will
shift to smaller interest rate hike amid signs of cooling U.S.
With the energy crisis seen persisting in Europe, Citigroup
expects the euro zone and the UK to slip into recession by the
end of this year and forecast contractions of 0.4% and 1.5%,
respectively, for the coming year.
Among single stocks, argenx SE jumped 7.1% after
the Dutch biopharmaceutical company announced a deal to acquire
a U.S. FDA Priority Review Voucher (PRV) for $102 million.
United Internet added 5.4% after UBS upgraded
the German telecommunications provider's stock to "buy".
Avanza Bank Holding slid 5.2% after the
financial company flagged smaller boost from recent rate hike by
the Swedish central bank.
Telecom Italia (TIM) shed 5.2% after Italian
cabinet undersecretary Alessio Butti said that the state had no
plans to launch a full takeover bid for the former phone
(Reporting by Susan Mathew and Devik Jain in Bengaluru; Editing
by Savio D'Souza, Devika Syamnath and Maju Samuel)