Europe: Shares end the week before Christmas higher
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EUROPE’S Stoxx 600 was subdued on Friday (Dec 23) in thin pre-holiday trading after a turbulent week where hopes of an improving economic outlook overshadowed fears of recession and hawkish central banks.
The Stoxx 600 was flat by close and bound for a 0.6 per cent weekly advance.
With the early gains, the index looked set to recoup a small part of last week’s staggering 3.3 per cent loss, which was driven by heightened concerns of a recession after the US Federal Reserve and the European Central Bank signalled a prolonged rate-hike cycle.
US data on Thursday, showing a tight labour market and economic resilience, exacerbated those worries and dented expectations of a so-called “Santa rally” before the year-end.
Still, upbeat earnings from Nike and FedEx this week and improving consumer confidence in the US and eurozone have offered some hope that the economic downturn caused by sharp interest rate hikes may not be as bad as feared.
Morale among Italian businesses and consumers rose in December, data showed on Friday, although the manufacturing sector was more downbeat.
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“Investors have been weighing up some better-than-expected corporate earnings this week against macroeconomic concerns about rising interest rates and a global slowdown,” said Victoria Scholar, head of investment at Interactive Investor.
Thin trading volumes around the holidays could also be exacerbating market moves, Scholar added.
UK’s FTSE 100 and Ireland’s ISEQ were subdued in half-day trading. Other European bourses were open all day, with Germany’s Dax rising 0.2 per cent by close.
European markets will be closed on Monday, Dec 26, for the Christmas holiday.
On the economic data front, a report showed Spain’s economy expanded 0.1 per cent in the third quarter, slowing from a 2 per cent growth rate in the previous three-month period.
Shares of miners rose 0.8 per cent tracking firm copper prices on low inventories and hopes for economic recovery next year.
Industrials added 0.3 per cent, while banks edged up after posting declines in the previous session.
The rate-sensitive tech sector fell 0.6 per cent, limiting gains on the index.
Shares of French bank Credit Agricole and Italy’s Banco BPM edged up on striking a long-term bancassurance partnership on Friday.
Bavarian Nordic added 3.9 per cent after the vaccine maker signed a contract with the US Department of Defense. REUTERS
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