LONDON — European stocks closed higher on Thursday as investors continued to monitor political developments and the Covid crisis.
The pan-European Stoxx 600 closed up by 0.4%, with utilities stocks rising 1.8% to lead the gains as most sectors and major bourses entered positive territory.
Investors were digesting fresh political developments in Europe. In Germany, a new coalition government deal between the Social Democrats, Greens and Free Democrats was announced on Wednesday.
The agreement will see Olaf Scholz, Germany’s former finance minister, become Germany’s new chancellor when Angela Merkel leaves the post in early December.
Meanwhile, Sweden’s first-ever female prime minister, Social Democrat Magdalena Andersson, resigned just hours after being appointed. The move came after her budget bill failed and the Green Party quit the two-party coalition government.
European investors closely monitored the acute Covid crisis in the region this week amid rising infections that have prompted a handful of countries to introduce new Covid restrictions.
Italy announced Wednesday evening that it will introduce tighter Covid measures and Germany has narrowly avoided another lockdown with the incoming coalition reportedly wanting to wait and see if tighter Covid passport rules help to alleviate rising cases there. Nonetheless, incoming German leader Scholz said Wednesday that vaccinations are to be made compulsory for targeted groups.
On the data front, Germany’s third-quarter gross domestic product (GDP) grew by 1.7% quarter-on-quarter, fractionally below expectations, official statistics revealed Thursday.
Germany’s GfK consumer sentiment barometer showed that spiking inflation and the surge in Covid-19 cases is weighing on consumer morale heading into December. The survey fell to -1.6 points from a revised 1.0 in November.
In terms of individual share price movement, Remy Cointreau surged more than 13% to lead the Stoxx 600, after the French drinks group beat first-half profit expectations and raised its full-year outlook.
At the bottom of the European blue chip index, Swedish online gambling company Evolution plunged 16% after launching an internal review into allegations of conducting gambling business in banned countries.
Overnight in Asia-Pacific markets, shares were mixed as investors reacted to the Bank of Korea’s decision to raise its policy rate to 1%. The South Korean central bank’s decision followed a similar move by the Reserve Bank of New Zealand on Wednesday.
U.S. markets were closed Thursday for Thanksgiving and will close early on Friday in a shortened session.