European stocks soar as new year trading begins

LONDON — European stocks kicked off the new trading year with a bang on Monday, with most major regional indexes higher on the first trading day of the new year.

Germany’s DAX was up 0.9% in early deals while France’s CAC 40 was almost 1% higher. Italy’s FTSE MIB rose 1% after a flat start to the session and Spain’s IBEX was 0.6% higher.

Markets in the U.K. and Ireland and closed for the new year holiday, which means trading volumes in the region could be thinner on Monday.

On the Stoxx 600 index, German airline Lufthansa was the best performer, its share price up 5%, after Citigroup upgraded the stock rating to “buy” from “sell.” Danish wind turbine company Vestas Wind was the worst-performing stock, down 3.2% Monday.

The positive start for Europe comes after more choppy trade in Asia overnight, where shares were mixed on Monday. Some major markets in the region (namely Australia, mainland China and Japan) were also closed Monday for a holiday.

Trading in the shares and structured products of debt-ridden Chinese developer China Evergrande Group was halted in Hong Kong, according to an exchange notice. No immediate reason was given for the suspension.

Meanwhile, U.S. stock futures rose on Sunday evening as Wall Street looked to start off 2022 on a solid footing.

The new year starts with continued uncertainty around the Covid-19 pandemic, however. The rise of the omicron variant helped lead to thousands of flight cancellations during the holiday season and has led some businesses and schools to consider temporary closures. Several major Wall Street banks have asked employees to work from home for the first few weeks of January.

Infectious disease expert Dr. Anthony Fauci told ABC’s “This Week” on Sunday that U.S. health officials may soon update guidelines to include a testing recommendation to signal when a person who previously tested positive for Covid can leave isolation.

Inflation and monetary policy are also expected to be key themes for 2022, as investors expect the Federal Reserve to hike rates multiple times in the coming year to help cool the rise in prices for consumers.

Data releases include final purchasing manager’s index data for the euro zone in December and new car registrations in Spain, Belgium and Denmark for December.

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— CNBC’s Jesse Pound and Eustance Huang contributed to this market report.

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