Europe’s benchmark stock index had its biggest one-day gain in more than three months on Friday (Apr 26), propelled by banking and industrial stocks, while the technology sector got a boost from upbeat results from US megacaps.
The pan-European Stoxx 600 index closed 1.2 per cent higher, notching up a weekly gain of 1.8 per cent, its biggest since late January.
The basket of Stoxx 600 banks touched a nine-month high, aided by a 6.1 per cent jump in NatWest after the British bank’s first-quarter results.
Industrials climbed 1.8 per cent, led by a 11.4 per cent leap in Finnish engineering group Wartsila after first-quarter order intake and core profit beat estimates.
Construction and materials led sectoral gains, up 2.1 per cent, with Saint Gobain’s shares 6.9 per cent higher after a first-quarter revenue beat.
The technology sector jumped 1.9 per cent as investors took comfort from upbeat quarterly results from Microsoft and Alphabet and a moderate rise in US inflation.
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Meanwhile, expectations of a June interest rate cut were bolstered by a European Central Bank (ECB) report revealing continued stagnation in eurozone lending in March, and consumers trimming their inflation expectations as the economy loses steam.
“The ECB has prepared the ground for a first rate cut in June, but has sent a conditional signal for that,” Deutsche Bank analysts wrote.
“The decision to dial back the degree of policy restriction will be a function of how the Governing Council reads the inflation outlook, underlying inflation and the transmission of the monetary stance,” Deutsche Bank added.
Even though the benchmark Stoxx 600 regained its pace this week, it is set to snap a five-month winning streak as investors try to navigate concerns over escalating Middle East tensions, a mixed corporate earnings and uncertainty over policy outlook.
Among others, Swedish home appliance maker Electrolux climbed 6.5 per cent after a lower-than-expected first-quarter operating loss.
Thyssenkrupp rose 6.2 per cent as the German conglomerate said it will sell a 20 per cent stake in its steel business to the energy holding controlled by Czech billionaire Daniel Kretinsky.
Danish shipping giant Maersk advanced 6.2 per cent, with analysts pointing to an uptick in the Shanghai Containerized Freight Index spot freight rates.
Chemicals were the only sectoral laggard as Yara International, one of the world’s largest fertiliser makers, fell 6.2 per cent after missing first-quarter profit forecasts.
Delivery Hero slumped 16 per cent, a day after a guidance hike sent the stock as much as 14 per cent higher.
Signify shed 11.3 per cent as the world’s biggest maker of lights missed expectations for first-quarter adjusted core earnings. REUTERS
