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Europe: Shares rally after US data but Eutelsat plunges
[LONDON] European shares rebounded from losses earlier in Friday's session as strong US retail sales data buoyed markets, although satellite company Eutelsat plunged nearly 30 per cent after slashing its outlook.
The pan-European FTSEurofirst 300 index had spent much of the day in negative territory, but swung back up to close 0.6 per cent higher following the US figures.
The data showed US retail sales in April recorded their biggest increase in a year, suggesting that the world's biggest economy was regaining momentum after growth almost stalled in the first quarter. "The strong US data has lifted European markets, and we are fairly bullish in the medium term," said MB Capital trader Rick Jones.
French video games maker Ubisoft climbed 8 per cent after higher sales and a bullish outlook.
However, Eutelsat slumped 27.6 per cent, making it the worst-performing stock in the region. The satellite company cut its outlook late on Thursday and suffered ratings downgrades on Friday.
European markets have sagged in recent weeks, with some investors blaming strength in the euro, uncertainty before Britain's vote on June 23 on European Union membership, and a political stalemate in Spain.
The FTSEurofirst remains down by around 10 per cent so far in 2016, and the International Monetary Fund (IMF) said on Friday that a vote by Britain to leave the EU next month could hit the global economy and world stock markets.
The euro dipped against the dollar as the US currency rose on the retail sales data, but some fund managers remained wary of European equities. "We're quite cautious about the European market even though valuations are not expensive. Before taking big bets, investors need to know what will happen on the political front and where the euro will go," said Matteo Ramenghi, Chief Investment Officer at UBS WM Italy.