Europe: Stocks end higher but log worst week in 6 months

[BENGALURU] European shares edged higher on Friday as Marks & Spencer lifted retailers, but the benchmark Stoxx 600 still marked its worst week since February on signs of slowing economic growth and rising Covid-19 cases.

The pan-European Stoxx 600 index was up 0.3 per cent, with the retail sector gaining 1.2 per cent.

British retailer Marks & Spencer jumped 14.1 per cent to the top of the Stoxx 600, as it hiked its profit outlook after a jump in demand for food and a surge in online clothes' orders indicated that its latest turnaround plan was starting to deliver.

London's FTSE 100 index rose 0.4 per cent, while Germany's DAX was up 0.3 per cent. Frankfurt shares recovered from a fall earlier in the session after data showed a bigger-than-expected jump in producer prices in July.

The mining index ended flat, becoming the worst performing European sector for the week.

Signs of a slowdown in the global economic recovery and a surge in cases of the Delta variant of the coronavirus have knocked Europe's Stoxx 600 off record highs this week.

The index slumped 1.5 per cent on Thursday alone, tracking a fall in global equities on indications the US Federal Reserve could start reining in easy money policies later this year.

"Progress made by countries in dealing with Covid-19 still seems to have had little bearing, in general, on the relative performance of their stock markets," said Bethany Beckett, UK economist at Capital Economics.

"Instead, swings in sentiment about the virus at a global level appear to have continued to exert a bigger influence via sector rotation." Ms Beckett expects this trend to persist.

Focus next week will be on the high-profile annual US Jackson Hole central bankers' conference, where Fed Chair Jerome Powell could signal he is ready to start easing monetary support.

ECB President Christine Lagarde will not attend the conference, a spokesperson for the central bank said this week.

Luxury goods rebounded from declines earlier in the day to gain 0.5 per cent, but fell 5.5 per cent over the week, pressured by worries over possible wealth policy developments in China.

UK supermarket Morrisons rose 4.2 per cent after agreeing to a takeover offer worth 7.0 billion pounds (S$13.0 billion), while Swedish real estate web portal Hemnet surged 27.8 per cent on an upbeat quarterly report.

REUTERS