Europe: Stocks clock second straight weekly gain
EUROPEAN shares closed near a nine-month high on Friday (Jan 13), supported by healthcare and banking stocks and upbeat economic data from Britain.
The pan-regional STOXX 600 gained 0.5 per cent, outperforming their US peers after reporting season kicked off with mixed bank earnings. The European index closed its second consecutive week higher, with gains of 1.8 per cent.
European banking stocks gained 0.8 per cent.
UK’s FTSE 100 added 0.6 per cent after data showed the British economy eked out 0.1 per cent growth in November, helped by a boost from World Cup drinkers and video game sales, reducing the chance that it has already slipped into recession.
In Germany, data showed the economy likely stagnated in the final quarter of last year and grew by 1.9 per cent over the full-year 2022, suggesting Europe’s largest economy may just escape a recession over the winter. German stocks closed 0.2 per cent higher.
European shares have made an upbeat start to January and the new year, after data signalled a slowdown in inflation in the euro zone and the United States, which could allow central banks to slow the pace of their monetary policy tightening.
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“Some better GDP figures from the UK and Germany added to the cheerier atmosphere on Friday, and while equities might look a bit overextended in the short-term, they do seem poised for a better start to the year than many had feared,” said Chris Beauchamp, chief market analyst at online trading platform IG.
Rate-sensitive tech and retail stocks have led gains so far this year, up 14 per cent and 15 per cent, respectively, after a rough 2022 when fears of an economic slowdown and rising interest rates hammered these sectors.
On Friday, healthcare stocks provided the biggest boost to the index, with Novo Nordisk A/S and Roche Holding AG gaining 2.5 per cent and 1.0 per cent, respectively.
Enel edged up 0.4 per cent after its chief executive officer was quoted as saying the Italian power utility company could secure up to 5 billion euros for investment from REPower EU energy funds in addition to 3.5 billion euros in EU recovery funds already won.
Shares of online gaming company Kindred Group tumbled 15.9 per cent on profit warning for the fourth quarter. REUTERS
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