European stocks rise on optimism about reopening in China

European stocks rose on Friday as bullish investors weighed the potential impact of the week-long Lunar New Year holiday after China lifted restrictions imposed to curb the spread of COVID-19, but fears of a global economic slowdown continued to dampen sentiment.

The pan-European Stoxx 600 index was up 0.2 percent by 0813 GMT, propelled by the banking and industrial sectors.

Shares of luxury sectors with exposure to China, such as Louis Vuitton and Hermes International, increased by more than 1% each, amid optimism about reopening in China.

Energy stocks rose more than 1 percent, following the lead of crude oil prices, on hopes of a recovery in demand in the world’s second-largest economy.

On Friday, China said the worst was over in its battle against COVID-19, before what was expected to be one of its busiest travel days in years, fueling fears of a further surge in infections.

Sweden’s Ericsson fell 8 percent as the networking and communications company’s core earnings missed expectations for the third consecutive quarter.

Sandvik shares rose 3.4 percent after fourth-quarter earnings beat expectations.