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(Reuters) – European shares inched up on Monday as gains in healthcare stocks helped the benchmark index extend its sharp rally thus far into the new year, while UK’s FTSE 100 hovered close to a record high.
The pan-European STOXX 600 gained 0.1% in early trading, boosted by a 0.8% rise in healthcare stocks.
Pharmaceutical companies such as Koninklijke Philips (NYSE:PHG) and Novo Nordisk (NYSE:NVO) added more than 2% each.
The pan-European index has added 6.6% since the start of the year, as warmer weather added to hopes of a milder-than-expected recession in the region and data signalled an easing of price pressures in the United States and the eurozone.
UK’s FTSE 100 rose 0.1% to 7,852.84, inching closer to a record 7,903.50.
“Investors appear to have fallen back in love with UK assets, after a difficult period when FTSE 100 was the wallflower among global indices,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“Confidence has rebounded as investors eye up China’s reopening, helping commodity stocks. A stronger than expected appetite from consumers has boosted the retail, travel and hospitality sectors, while banks are still riding the wave of higher interest rates.”
The World Economic Forum’s annual winter shindig in Davos kicked off earlier in the day following a three-year hiatus, with investors keeping an eye on commentary from several central bank policymakers and industry leaders.
Also, in focus was a meeting of EU finance ministers, European Central Bank (ECB) President Christine Lagarde and ECB board member Fabio Panetta in Brussels due later in the day.
Weakness in luxury heavyweights such as LVMH and Hermes International (OTC:HESAF) weighed on Europe’s STOXX 600 on Monday.
In company news, Temenos added 5.4% after Chief Executive Officer Max Chuard quit the Swiss financial software company which has been under pressure from activist shareholders.
Marks & Spencer (OTC:MAKSY) gained 0.8% after the British clothing and food retailer said it planned to open 20 new stores in its 2023-24 financial year as part of a 480 million pound ($587 million) investment in its store estate.
Swiss construction chemicals maker Sika added 0.9% after agreeing to sell part of its admixture business to UK-based chemical and energy group INEOS.
German arms maker Rheinmetall gained 2.9% on acquiring a stake in Dutch IT hardware specialist Incooling B.V.
