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* STOXX 600 gains for third straight session
* Travel stocks rise on Omicron updates
* Banks track yields higher
* Holcim gains on $1.35 bln deal
(Updates to close)
By Anisha Sircar and Shashank Nayar
Dec 23 (Reuters) - European shares hit a one-month high on
Thursday, led by gains in banking stocks as signs the impact of
the Omicron variant may be less severe than feared led to
improved risk appetite that pushed eurozone and Treasury yields
higher.
The pan-European STOXX 600 gained 1%, marking the
third straight session of gains, boosted by banks and
travel stocks, tracking a global share rally that was
also helped by robust U.S. economic data.
Two vaccine makers said their shots protected against
Omicron as UK data suggested it may cause proportionally fewer
hospital cases than the Delta coronavirus variant, though public
health experts warned the battle against COVID-19 was far from
over.
Researchers from University of Edinburgh and Imperial
College London reported evidence that the Omicron variant was
less severe than the Delta coronavirus variant.
"The Omicron wave won't derail the economic recovery that's
well underway, it might delay it, but 2022 will have an
attractive, healthy economic environment," said Philip
Petursson, chief investment strategist at IG Wealth Management.
European government bond yields rose for the
fourth consecutive session and benchmark U.S. Treasury yields
rose to two-week highs as the trickle of risk
sentiment back into the market reduced the need for safe-haven
debt, helping push bank stocks higher.
The STOXX 600 is set to gain around 21% this year, mildly
underperforming a 26% gain in the S&P 500 and is a mere 1.5%
away from its record highs.
"This year, economies reopened from 2020 lockdowns and
benefited from all the fiscal stimulus. 2022 will be the path to
normalisation of equity returns, interest rates and economic
growth," Petursson said.
AstraZeneca added to the positive sentiment after
the drugmaker said a three-dose course of its COVID-19 vaccine
was effective against the Omicron variant, citing data from an
Oxford University lab study.
Swiss building materials company Holcim gained 1.9%
after saying it would buy Malarkey Roofing Products for $1.35
billion to expand into the growing U.S. residential roofing
market.
Flutter Entertainment rose 2.1% after announcing
it would buy Italian online gaming operator Sisal for 1.62
billion pounds ($2.16 billion), as the online betting group
looks to expand its footprint in Europe.
Continental AG added 2.5% after its CEO told a
magazine that the German automotive supplier could hit the upper
end of its profit margin outlook in 2021 as vehicle production
picked up in the fourth quarter.
(Reporting by Anisha Sircar and Shashank Nayar in Bengaluru;
Editing by Shounak Dasgupta and Barbara Lewis)
