European stocks hit record high, led by travel sector; Wizz Air up 12%

LONDON — European stocks hit a record high on Tuesday as the new year momentum continued in global markets.

The pan-European Stoxx 600 index provisionally closed 0.8% higher, having earlier reached an intraday record of 495.41. Most sectors and major bourses were in positive territory.

Airline and travel stocks were among the biggest gainers on the index, with the sector up 3.3%. Wizz Air led the gains, surging nearly 12%, while International Consolidated Airlines Group and TUI were also among the top performers.

Stocks that had benefited from stay-at-home restrictions were among the worst performers. Online grocery firm Ocado sank over 7% while Hellofresh was down 9%.

It comes after stocks in the region kicked off 2022 with a bang on Monday, as most major regional indexes were higher on the first trading day of the new year.

There is still much uncertainty around the Covid-19 pandemic, however, with multiple countries around the world reimposing restrictions or lockdowns to stop the spread of the highly contagious omicron variant. Inflation and monetary policy will be key themes for 2022, as investors expect the U.S. Federal Reserve to hike rates in the coming year to help cool the rise in prices for consumers.

U.S. stocks were higher on Tuesday as the Dow Jones Industrial Average and S&P 500 hit new records. Meanwhile, shares in Asia-Pacific were mixed in Tuesday trade, as data showed accelerating Chinese factory activity growth in December.

Investors are keeping an eye on shares of debt-laden China Evergrande Group, which briefly surged more than 6% after resuming trade following a Monday halt. They then gave up some of those gains. Evergrande announced Tuesday that it saw 443.02 billion yuan (about $67.67 billion) worth in contracted sales of properties in 2021 — a more than 30% plunge from 2020′s figure.

— CNBC's Maggie Fitzgerald, Eustance Huang and Sam Meredith contributed to this market report.