Europe: Shares post weekly gain on strong miners, banks slump

[MILAN] European shares edged higher on Friday, ending the week in positive territory thanks to corporate earnings and robust basic resources stocks, though declines among Italian banks led that sector to its worst week since November.

The pan-European Stoxx 600 index was up 0.1 per cent and set for a weekly gain of 0.9 per cent that brought it close to a 13-month peak hit in January.

The week saw volatility because of investor unease over how parliamentary elections in France this spring might pan out and the re-emergence of concerns that Greece might leave the euro.

"Sentiment today is supported by good economic data from China, Italy and the UK... but the week has seen ups and downs as investors seek reassurance that Europe will hold together," said Carlo Alberto De Casa, Chief Analyst at ActivTrades.

French entertainment company Ubisoft was the top Stoxx gainer, up 10.9 per cent after it revised its profitability target upwards.

Stronger than expected trade figures from leading metals consumer China buoyed copper prices to their highest level since June 2015, in turn lifting mining stocks.

The Stoxx 600 Basic Resources index posted its best daily gains since Nov 9, the day of Donald Trump's election as US President. The index closed up 3.7 per cent, the biggest sectoral gainer in Europe.

It was also lifted by shares in ArcelorMittal, the world's largest steelmaker, which rose 9.3 per cent after posting a higher-than-expected quarterly core profit.

Swedish mining and smelting firm Boliden contributed to mining gains, up 9.7 per cent after well-received earnings including a higher than expected dividend. The shares touched their highest level since early 2000.

Banks across Europe showed weakness, with the banking index down 0.8 per cent as Italian banking results weighed.

Banca Popolare dell'Emilia Romagna, was the top European faller, down 7.8 per cent reporting a plunge in net income late on Thursday.

UBI Banca fell 5.7 per cent after it posted a 2016 net loss of 830.2 billion euros (S$1.26 trillion). The banks caused Italy's FTSE MIB to underperform its peers, closing down 0.5 per cent.

Banks also weighed on Spain's IBEX which was down 0.6 per cent.

British online takeaway company Just Eat tumbled 6.7 per cent after CEO David Buttress unexpectedly stepped down.

REUTERS