European stocks saw modest growth on Friday, driven in part by expectations for interest rate reductions slated for the second quarter. Francois Villeroy de Galhau, an ECB member and head of the Bank of France, suggested that the central bank prioritise gradual rate cuts rather than risk delaying this year's necessary reductions. This assertion was made during his interview with the Belgian newspaper L'Echo.
As per the latest economic data, UK retail sales in January significantly exceeded expectations, with a rebound of 3.4% after a 3.3% decrease in December. This performance exceeded economists' projection of a 1.5% increase for the month.
In other news, January's figures revealed Germany's wholesale prices experienced their first increase in four months, despite an annual decline primarily due to falling mineral oil product prices, according to preliminary data by statistical office Destatis. The wholesale price index increased by 0.1% from the previous month, marking the first monthly increase since September 2023, when wholesale prices rose by 0.2%.
The pan-European STOXX 600 index saw an increase of approximately half a percent, recording a two-year high of 490.85. Germany's DAX and the UK's FTSE 100 both climbed 0.7%, while France's CAC 40 rose half a percent.
In company updates, Italy's ENI SpA reported a nearly 2% drop due to a Q4 earnings decrease from the previous year. Meanwhile, Swiss Re experienced a 1.8% decrease despite posting a considerably higher profit for the last year, largely credited to an improved performance with its property and casualty reinsurance segment.
Finnish mining equipment manufacturer Metso saw its shares skyrocket by 10% following an optimistic outlook coupled with a better-than-expected Q4 earnings report. On the downside, Belgium's Umicore saw a 2.5% decline after projecting a 2024 core profit that fell below expectations.
Italian financial institution Unipol Gruppo spiked 21% following its plans to fully acquire its subsidiary, UnipolSai. Conversely, LED lighting front-runner Dialight saw a near 2% drop after CEO Fariyal Khanbabi decided to step down with immediate effect.
Good news came from NatWest Group as it saw a rise of over 2% upon announcing its largest annual profit last year since the 2007 financial crisis. Warehouse entity Segro closed at a 1.3% increase after decreasing its FY23 loss before tax, attributing this performance to rent growth and strong demand from occupants.
Despite reporting enhanced full-year portfolio-adjusted sales and operating income, German automotive parts supplier Hella fell about 2%. Meanwhile, Volkswagen enjoyed a 1% boost upon sealing a supply deal with India's Mahindra & Mahindra. The agreement allows the German automaker to utilise Mahindra & Mahindra's key electric components in support of Volkswagen's open platform for electric vehicles.
