Friday saw the closing of European stocks on a high note, pushing further the recent gains. This result was encouraged by favorable UK retail sales data and positive corporate earning updates. Expectations of interest rate cuts by several central banks in the latter half of the year also boosted investor morale in the region.
The pan-European Stoxx 600 rose by 0.62%. The UK's FTSE 100 experienced a significant surge of 1.5%, while Germany's DAX and France's CAC 40 increased by 0.42% and 0.32% respectively. Switzerland's SMI saw a slightly smaller gain of 0.23%.
Other European markets, including Austria, Denmark, Finland, the Netherlands, Norway, Poland, Portugal, and Sweden also closed with greater value. Belgium, Greece, and Turkey made marginal gains, while Iceland, Russia and Spain saw their markets weaken.
In the UK's market, Natwest Group saw a notable rise in shares, with an increase of around 7.5%. This increase was spurred by the announcement of the bank's greatest annual profit since the 2007 financial crisis. Companies such as Antofagasta, Lloyds Banking, Weir, Rio Tinto, Prudential, and Centrica saw increases ranging from 3.2 to 4%.
Airtel Africa, however, saw a decrease of 3.3%, while both Ocado Group and Vodafone Group experienced slight drops of 1.3% and 1% respectively.
In Germany, HeidelbergCement saw a rise of 3%. Other companies including MTU Aero Engines, Bayer, Porsche, Sartorius, Siemens Healthineers, BMW, Adidas, Siemens, Mercedes-Benz, and BASF experienced gains between 1 to 2%. Conversely, Commerzbank saw a decrease of 2.2%, while Munich RE, Zalando, Hannover Rueck, RWE, and E.ON had losses ranging from 0.8 to 1.25%.
In Paris, Eurofins Scientific experienced an impressive gain of 4.3%, Safran increased by approximately 2.8% and other companies such as Schneider Electric, Legrand, ArcelorMittal, Alstom, Dassault Systemes, L'Oreal, and Kering experienced gains between 1 to 2%.
Investors in Finnish mining equipment manufacturer Metso enjoyed a 9% increase in shares due to an optimistic outlook supported by better-than-expected fourth quarter earnings. Shares of the Italian financial group Unipol Gruppo saw a significant surge of 21% on the back of an announcement of intentions to buy out its unit UnipolSai MIL:US.
Statistics paint a positive picture for the UK's economic future, with retail sales growing at their fastest rate since early 2021. This data suggests a likelihood of the economic recovery gaining momentum in Q1 2024 as a result of increased consumer spending.
Indeed, January's retail sales volumes saw a rebound of 3.4%, following a record fall of 3.3% in December, amounting to the largest monthly rise since April 2021.
Lastly, preliminary data from the German statistical office, Destatis, showed wholesale prices rose for the first time in four months in January, although there was still a decrease when compared to the same month last year. This is mainly due to the decline in prices of mineral oil products. The wholesale price index rose by 0.1% in January, marking the first monthly increase since September 2023.
