- Sanofi slips amid Horizon deal talks
- STOXX 600 gains 0.6% this week
Dec 2 (Reuters) - European shares fell back on Friday after two days of strong gains that helped the STOXX 600 index notch up its seventh straight week of rises amid signs of China re-opening its economy and easing worries about interest-rate hikes.
The pan-European index (.STOXX) closed 0.2% lower after rallying 1.5% in the last two sessions. The index gained 0.6% over the week, and registered its longest weekly winning streak since April 2021.
"There appears to be some profit-taking after sessions characterised mostly by risk-on appetite. Optimism towards the economic reopening in China has helped drive gains," Victoria Scholar, head of investment at Interactive Investor, said.
Chinese officials this week softened their stance on strict COVID curbs that have hit global growth amid protests in the country.
Rate-sensitive technology stocks also took a hit as euro zone government bond yields rose in line with a move in U.S. Treasury yields after data showed U.S. employers hired more workers than expected in November and increased wages despite mounting worries of a recession.
"Strong job creation and a big increase in wages underscore the Federal Reserve's argument that a lot more work needs to be done to get inflation under control," James Knightley, chief international economist at ING, said in a note.
"It has certainly jolted the market. But with recessionary fears lingering, market participants will remain sceptical over how long the strong performance can last."
However, ECB Vice-President Luis de Guindos said on Friday the central bank needs to focus on bringing inflation down to its 2% mid-term goal and therefore keep raising interest rates despite a recent deceleration in the pace of price rises.
Our Standards: The Thomson Reuters Trust Principles.