European markets closed on a positive trajectory on Friday, buoyed by optimism concerning the Federal Reserve's future interest rate decisions. This sentiment was driven by soft U.S. consumer price inflation data and tempered remarks from Fed Chair Jerome Powell during his congressional testimony earlier in the week.
Adding to the buoyant market mood were positive quarterly earnings and several encouraging economic indicators from the European region.
The pan-European Stoxx 600 index rose by 0.88%. In the UK, the FTSE 100 advanced by 0.36%. Germany's DAX surged by 1.15%, France's CAC 40 increased by 1.27%, and Switzerland's SMI was up 0.89%.
Other European markets that recorded gains included Austria, Belgium, Denmark, Finland, Greece, Iceland, Netherlands, Norway, Poland, Portugal, Spain, Sweden, and Turkey. Russia, however, experienced a downtrend.
In the UK market, RightMove saw a significant rise of 4%. Spirax Group, Frasers Group, Next, Marks & Spencer, Antofagasta, Howden Joinery, Croda International, Taylor Wimpey, Vistry Group, Intertek Group, Associated British Foods, Experian, IMI, Weir Group, Kingfisher, Tesco, JD Sports Fashion Group, AstraZeneca, and Entain posted gains ranging from 1.2% to 3%.
Conversely, United Utilities fell by 3.4%. Endeavour Mining, Rentokil Initial, Severn Trent, Centrica, Airtel Africa, and Prudential ended the day down by 1% to 2.3%.
The German market also saw robust activity, with MTU Aero Engines, Puma, Siemens, HeidelbergCement, Infineon, Adidas, Deutsche Boerse, and Daimler Truck Holding climbing by 2% to 3.5%. Companies like Zalando, Volkswagen, SAP, Henkel, BMW, Deutsche Post, Bayer, BASF, Mercedes-Benz, Fresenius Medical Care, and Allianz finished higher, recording gains between 1% and 3.5%.
In France, Hermes International, ArcelorMittal, Capgemini, Legrand, Kering, Schneider Electric, LVMH, L'Oreal, Essilor, Dassault Systemes, Air Liquide, Michelin, Societe Generale, and STMicroElectronics advanced by 1.4% to 3%.
Shares in Swedish telecom firm LM Ericsson leaped nearly 4.5% after its EBITA, an essential earnings measure, surpassed analysts' expectations for the second quarter. Equally, Lifco AB soared almost 10% following a robust quarterly earnings report. Norwegian company Aker Solutions ASA skyrocketed by 18% after exceeding profit expectations for the second quarter.
On the economic front, Germany's wholesale prices continued to decline in June, although the rate of decline moderated, as reported by Destatis. Year-over-year, wholesale prices fell by 0.6% in June, following a 0.7% decrease in May. The downward trend in wholesale prices began in May 2023. On a month-over-month basis, wholesale prices dipped by 0.3% in June, compared to a 0.1% rise in May, marking the fourth consecutive monthly decrease.
In France, consumer price inflation edged slightly higher than initially estimated in June, according to final data from the statistical office INSEE. The consumer price index increased by 2.2% year-over-year in June, following a 2.3% rise in May. This rate was marginally above the preliminary estimate of 2.1%. Core inflation also rose marginally to 1.8% from 1.7% in May. On a month-over-month basis, overall consumer prices inched up by 0.1%, consistent with the flash estimate, after staying flat in May.
