European shares climbed on Tuesday, tracking a global rally in equities after China further relaxed its COVID-19 curbs, raising hopes of a recovery in the world’s second-largest economy.

The pan-European STOXX 600 index gained 0.6% after a long Christmas holiday weekend.

It has lost nearly 12% so far this year.

Concerns of economic recession due to central banks’ aggressive monetary policy tightening have hit European equities hard this year.

Lifting shares globally on Tuesday, China said it would drop its quarantine requirements for inbound visitors, further easing three-year border controls aimed at curbing COVID.

Miners and energy stocks added 1.2% and 1.4% as commodity prices jumped on hopes of demand recovery in top consumer China.

China-exposed luxury firms LVMH and Kering rose 1.9% and 1.3%, respectively. Industrials and banks gained for a second straight session, lifting the broader European index.

European shares end the week before Christmas higher

Traders and analysts also said thin trading volumes during the holidays influenced market moves.

Leonteq fell 1.0% after the Swiss fintech firm said it was lowering its profit expectations for 2022 due to reduced client demand in the second half of the year.