Europe: Stocks end week with gains on telecoms, tech boost

[BENGALURU] European shares closed higher on Friday, marking weekly gains as investors focused on a broadly supportive earnings season and improving economic data in Europe rather than rising US-China tensions.

The main indices spent the morning in the red after US President Donald Trump moved to ban US transactions with the Chinese owners of messaging app WeChat and video-sharing app TikTok, further escalating friction with Beijing.

Amsterdam-listed Prosus, with its biggest investment in Tencent, fell 4.0 per cent.

Markets, however, stabilised later, boosted by telecommunications, technology and healthcare stocks.

The pan-European STOXX 600 index, up 0.3 per cent, closed out with weekly gains of 2 per cent. German stocks rose 0.7 per cent, while London's FTSE 100 and France's CAC 40 were flat, but all logged weekly rises.

Data showed US jobs increased by a better-than-expected 1.763 million in July, although the pace of recovery slowed amid a resurgence in new coronavirus infections, pressuring the White House and Congress to agree another aid package.

"The jobs numbers were surprisingly good," said Nancy Tengler, chief investment officer of Laffer Tengler Investments. "But we expect a moderation in jobs improvement in the near-term as businesses wait to see what Washington comes up with."

With the bulk of the European earnings season over, investors were relieved that most companies had exceeded analysts' much-lowered forecasts for quarterly profits. Refinitiv data showed about 60 per cent of the STOXX companies that have reported so far beat estimates.

Hikma Pharmaceuticals jumped 10.9 per cent after saying it had started manufacturing remdesivir, an approved treatment for Covid-19 from US-based Gilead, and it raised its annual sales outlook for two of its biggest divisions.

Deutsche Telekom, which owns 43 per cent of T-Mobile , rose 2.7 per cent after the US firm added more monthly subscribers than expected in the second quarter and said it surpassed rival AT&T.

The broader telecoms index rose 1 per cent to lead sectoral gains, although stocks considered more sensitive to business cycles, including banks, miners and oil and gas companies, handed back some of this week's steady gains.

Standard Life Aberdeen's shares inched higher after the asset manager said it would pay a dividend even as its profit dropped 30 per cent.

REUTERS