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After European stocks rose for two consecutive days, defensive sectors supported European stocks by Reuters

© Reuters. The German stock price index DAX chart was taken on December 7, 2021 on the Frankfurt Stock Exchange in Germany. REUTERS/Staff

By Sruthi Shankar

(Reuters)-European stocks rose slightly on Wednesday after their strongest two-day gains in more than a year, led by defensive stocks as investors weighed the effectiveness of existing vaccines against Omicron coronavirus variants .

After rising 3.8% in the past two days, the regional index rose 0.3% in early trading.

BioNTech stock listed in Frankfurt, which produces COVID-19 vaccine Pfizer (NYSE:), after a study showed that the Omicron variant could partially evade the protection of two doses of vaccine, it fell by 6.3%.

Industries that are considered more stable during periods of economic uncertainty, such as healthcare, food and beverages, and public utilities, saw the top gains.

Keith Temperton, a sales trader at Forte Securities, said: “The evidence is starting to become clear, showing that it is a more spreadable but less destructive variant.”

“The initial panic was all about the government’s response to this variant, and the market is seeing through this. The market is light at this time of the year and it doesn’t take much to push the stock market higher.”

The STOXX 600 index has recovered all losses caused by the detection of the new variant on November 26, and the current transaction price is less than 2% below its historical high.

Friday’s U.S. inflation data and a series of major central bank meetings next week may set the tone for financial markets as investors try to gauge when policymakers begin to withdraw stimulus measures during the pandemic.

L’Oréal rose 1.3% after the Swiss food company Nestlé said it would cut its stake in French cosmetics brands to about 20% by selling shares worth 8.9 billion euros ($10 billion).

Nestlé shares rose 1.5%, hitting a record high, pushing the Swiss index to a new high.

Travel stocks fell as the UK-listed shares of tour operator TUI fell 3.2% after the company reported an annual loss of more than 2 billion euros ($2.26 billion).

Other economic-related industries such as oil and gas, banks and automakers also fell.

German restaurant company Hellofresh fell 6% after poor profit prospects in 2022.

Chip maker Infineon (OTC:) Technologies fell 3.5%, STMicroelectronics fell 1.1% Morgan Stanley (NYSE:) Downgrade the stock rating to “equal weight”.

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