Europe: Stocks end higher but mark first weekly loss in four

EUROPEAN stocks steadied on Friday (Aug 4), after a three-day sell-off, as some upbeat earnings as well as US jobs data highlighting resilience in the world’s largest economy outweighed jitters around slowing eurozone growth.

The pan-European Stoxx 600 index ended up 0.3 per cent, after shedding around 3 per cent in the past three sessions.

Data from the US showed the economy added fewer jobs than expected in July, but solid wage gains and a decline in the unemployment rate pointed to continued tightness in labour market conditions.

Analysts said the data added to hopes that the Federal Reserve could end its monetary tightening soon, with a “soft landing” for the US economy.

Wall Street indexes also rose after the payrolls data and as a strong forecast from Amazon.com outweighed a downbeat sales outlook from iPhone maker Apple.

Stock markets on both sides of the Atlantic have rallied in recent weeks, driven by signs of resilience in the US economy and hopes that major central banks are near the end of their monetary tightening cycle.

But weak economic data out of Europe and Asia and the surprise downgrade on the US credit rating led the Stoxx 600 to shed 2.4 per cent for the week, snapping three straight weeks of gains.

“(Sentiment for Europe) is looking a bit less rosy than just a week or so ago,” said Stuart Cole, chief macro economist at Equiti Capital.

“The fears of an economic hard landing have very much shifted away from the US and are now centred on the EU (and the UK).”

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Earnings were a mixed bag in Europe. French bank Credit Agricole climbed 6.1 per cent as strong insurance and consumer finance results helped it report upbeat quarterly earnings.

Italy’s state-owned bank Monte dei Paschi di Siena jumped 2.8 per cent as it posted above-forecast earnings for the second quarter.

WPP, the world’s biggest advertising group, slid 3.4 per cent after it downgraded its full-year like-for-like growth forecast.

Vonovia slipped 1.3 per cent as Germany’s largest real estate group reported a two billion euro (S$3 billion) second-quarter loss and wrote down the value of its properties by three billion euros.

Commerzbank lost 2.6 per cent after the German lender raised its cost outlook and cut its commission income forecast.

Among the Stoxx 600 companies that have reported so far, more than half have beaten analysts’ profit estimates, as per Refinitiv IBES data. REUTERS