(Reuters) – European shares gave up gains on Tuesday as technology and consumer stocks slipped, offsetting a rally in commodity-linked shares spurred by hopes that Beijing could ease COVID-19 curbs following recent protests.
The pan-European STOXX 600 index was flat after having risen up to 0.5% following a strong rally in Asia where investors hoped that Chinese officials might announce some easing of pandemic-related curbs at a press briefing.
China issued a notice to ramp up COVID-19 vaccinations for the elderly, while a senior health official said public complaints about the country’s pandemic-related curbs stem from overzealous implementation rather than from the measures themselves.
European technology and consumer stocks led declines, which were offset by gains in miners and oil majors.
“(There) is cause for optimism because there wasn’t an immediate clamp down (in China),” said Danni Hewson, financial analyst at AJ Bell.
“Everybody thought that the (China) protests and what had already been a sort of softening in terms of zero-COVID would ultimately lead to a more relaxed stance from authorities, but there was a real concern that before that would happen, there would be a tightening.”
London’s FTSE 100 outperformed and was up 0.5%. Oil majors BP and Shell, as well as commodity-related companies such as Rio Tinto and Glencore rose between 1.0% and 3.4% as crude and metal prices rallied.
The STOXX 600 is on course to end November higher on hopes of an easing in China’s strict COVID-19 curbs and that U.S. monetary policy might be tightened at a less aggressive pace.
German shares inched lower on Tuesday with investors watching for consumer price inflation data due later in the session. The figure is expected to decline over the previous month.
“We possibly have seen the absolute peak in terms of German inflation data. The expectation is that it might fall back a tiny bit,” said Hewson.
Among stocks, easyJet fell 4.6% even as the British airline said bookings for next spring and summer looked positive as it warned about inflationary pressure.
ASM International jumped around 4.9% to a more than one-month high, after the Dutch semiconductor supplier said it now expects a smaller fall in fourth-quarter China sales.
(Reporting by Susan Mathew in Bengaluru; Editing by Savio D’Souza and Shounak Dasgupta)