Tech stocks nudge European shares higher, virus woes limit gains

November 26, 2020

(Reuters) – European shares inched higher in early trade on Thursday, but gains were limited as an extension of coronavirus restrictions in Germany and grim economic growth forecasts for the United Kingdom dented sentiment.

The pan-European STOXX 600 rose 0.1%, with tech and healthcare sectors leading gains. The benchmark index ended a four-day winning streak in the previous session as investors cashed in on gains after a vaccine-fuelled rally.

Chancellor Angela Merkel said on Wednesday Germany will extend restrictive measures imposed early this month to rein in a second wave that is sweeping much of Europe, until at least Dec. 20, as COVID-19 infection numbers remained high.

UK’s domestically exposed stocks stabilised after a sell off in the previous day, as Finance Minister Rishi Sunak warned the economy was on course to shrink by 11.3% this year and unveiled plans to borrow amounts not seen before in Britain’s peacetime.

Trading volumes are expected to be thin in light of the Thanksgiving holiday in the United States.

In company news, consumer goods group Unilever rose 1.5% on agreeing to buy U.S.-based vitamin company SmartyPants Vitamins.

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta)

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