European stocks were higher Tuesday morning, attempting to recover from a brutal sell-off in the previous session, despite concerns over a new coronavirus strain in the U.K.
The pan-European Stoxx 600 traded 0.7% higher, with Germany’s DAX and France’s CAC indexes rising around 0.9% and 0.8% respectively. Britain’s FTSE 100 rose 0.2% after initially falling. Banking stocks were the top gainers, up 1.2%, with Barclays and Lloyds both climbing nearly 3% to lead the sector.
Sterling extended Monday’s losses on Tuesday, falling another 0.5% to around $1.34.
Official data showed U.K. GDP grew by a record 16% in the third quarter, but that still didn’t make up for an 18.8% decline in the previous quarter when much of the economy was shut down.
European markets came under heavy selling pressure Monday amid concerns over a fast-spreading Covid mutation that was first identified in Britain. The new variant forced the U.K. government to shut down London and other parts of southeast England and backtrack on the mixing of households over the Christmas break.