# European shares end higher on China recovery optimism
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-28
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: European shares edge higher as China eases COVID curbs
Meta Description: European shares closed slightly higher as China relaxes COVID-19 curbs, boosting hopes of economic recovery. STOXX 600 index up 0.1%.
URL: https://financedigest.com/european-shares-end-higher-on-china-recovery-optimismhtml

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By Bansari Mayur Kamdar and Shreyashi Sanyal

(Reuters) -European shares closed a touch higher on Tuesday as China relaxing its COVID-19 curbs more raised hopes of a recovery in the world’s second-largest economy.

The pan-European STOXX 600 index gained 0.1%, kicking off a holiday-shortened week in the black.

China on Monday said it would drop its quarantine requirements for inbound visitors, further easing three-year border controls aimed at [curbing COVID](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened"). \[MKTS/GLOB\]

While London and Dublin [markets remained closed for the Christmas](https://www.financedigest.com/mull-it-over-living-near-the-uks-best-christmas-markets.html "Mull it over: Living near the UK’s best Christmas markets") holiday, most European bourses advanced.

Chinese reopening and the in-line U.S. [inflation data](https://www.financedigest.com/european-shares-rise-as-us-inflation-data-signals-end-of-rate-hike-cycle.html "European shares rise as US inflation data signals end of rate-hike cycle") on Friday could provide a “minor boost to equity markets,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

China-exposed luxury firms LVMH, Kering and Richemont rose between 1.7% and 2.4%.

The STOXX 600 Personal & Household index gained 0.9%, according to Refinitiv [data based on Thursday’s closing price](https://www.financedigest.com/how-insurance-providers-are-starting-to-use-adas-data-to-price-cover.html "How insurance providers are starting to use ADAS data to price cover").

Energy stocks added 0.4%, as oil [prices jumped on hopes of demand recovery in top](https://www.financedigest.com/4-for-the-price-of-1-what-you-can-buy-in-the-uks-top-northern-cities-for-the-price-of-a-london-pad.html "4 for the price of 1: What you can buy in the UK’s top northern cities for the price of a London pad") consumer China. \[MET/L\] \[O/R\]

But OCBC strategist Christopher Wong said “fast reopening can be double-edged sword. There is no let-up in the pace of relaxing [COVID restrictions in China despite](https://www.financedigest.com/asias-factory-activity-contracts-despite-chinas-covid-reopening.html "Asia’s factory activity contracts despite China’s COVID reopening") the surge in cases.

[Traders and analysts said thin trading volumes also influenced market](https://www.financedigest.com/analysis-bond-traders-get-their-swagger-back-in-rate-obsessed-markets.html "Analysis-Bond traders get their swagger back in rate-obsessed markets") moves.

German companies expect only a mild recession next year [despite headwinds](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL") from the energy crisis, raw material shortages and a tepid global economy, a Reuters survey showed.

Shares in Germany, Europe’s [largest economy](https://www.financedigest.com/at-chinas-largest-trade-fair-exporters-worry-about-world-economy.html "At China’s largest trade fair, exporters worry about world economy"), gained 0.4%.

The European STOXX 600 index has lost more than 12% so far this year, and is headed for its worst annual performance since 2018, on [fears of economic recession due to aggressive monetary policy tightening by central banks](https://www.financedigest.com/banking-turmoil-means-recession-fears-are-creeping-back.html "Banking turmoil means recession fears are creeping back") globally.

Among individual movers, Leonteq fell 5.4% after the Swiss fintech firm said it was lowering its profit expectations for 2022 due to reduced client demand in the [second half of the year](https://www.financedigest.com/ericssons-board-rebuked-by-shareholders-at-agm-for-second-year-in-a-row.html "Ericsson’s board rebuked by shareholders at AGM for second year in a row").

(Reporting by Bansari Mayur Kamdar and Shreyashi Sanyal in BengaluruEditing by Vinay Dwivedi, Eileen Soreng and David Evans)


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