European stocks closed strongly on Friday, bouncing back after recent downturns to multi-month lows. The recovery was bolstered by promising U.S. economic data and positive earnings reports from several European companies.
The pan-European Stoxx 600 rose by 0.83%. The UK's FTSE 100 advanced by 1.21%, Germany's DAX increased by 0.65%, and France's CAC 40 climbed by 1.22%. Switzerland's SMI also strengthened, closing 1.12% higher.
Other European markets, including Belgium, Finland, Greece, Iceland, the Netherlands, Norway, Spain, Sweden, and Turkiye, also ended the week on a positive note. In contrast, Denmark, Poland, Portugal, and Russia finished lower, while Austria saw marginal gains.
In the UK market, Natwest Group surged over 7%, and Anglo American Plc appreciated slightly above 5%. Intertek Group and Burberry Group rose by approximately 4.3% and 4.2%, respectively. Gains were also seen in JD Sports Fashion, Diploma, IMI, Vistry Group, Experian, Airtel Africa, Ashtead Group, Rolls-Royce Holding, Beazley, Reckitt Benckiser, ICG, Compass Group, Unite Group, and B&M European Value Retail, ranging from 2% to 3.3%. On the downside, Segro, RightMove, Pershing Square Holdings, Hargreaves Lansdown, and Fresnillo recorded losses.
In Germany, Sartorius surged by about 7%, while Rheinmetall, Puma, Merck, Qiagen, Siemens Energy, and HeidelbergCement gained between 2% and 4%. MTU Aero Engines, Adidas, Zalando, Munich RE, Porsche, and Brenntag saw increases of 1% to 1.8%. However, BASF fell by 2.3%, Fresenius Medical Care by 1.5%, Commerzbank by 1.25%, and BMW dipped by 0.7%.
In France, Essilor soared by more than 7% following robust financial performance for the first half of 2024. Saint Gobain, Dassault Systemes, Vinci, and Eurofins Scientific also posted gains of 3% to 4.3%. Hermes International rose approximately 4%, buoyed by a 13% increase in second-quarter sales, defying the luxury sector downturn. Teleperformance, Kering, L'Oreal, LVMH, Schneider Electric, Safran, Legrand, Air Liquide, Airbus, Engie, Pernod Ricard, and Danone saw advances ranging from 1% to 2.3%. Conversely, Unibail Rodamco plunged by more than 5%, STMicroElectronics fell by 4.2%, and Stellantis declined by 3.2%. Accor and Vivendi also ended significantly lower. Capgemini's outlook weakened as the IT consulting group projected a decline in annual revenue between 0.5% and 1.5%, against a previously expected 0-3% rise.
On the economic front, Eurozone consumers' inflation expectations remained stable in July, according to the latest consumer expectations survey by the European Central Bank. Expectations for the next year held steady at 2.8%, following a dip in May to their lowest since September 2021. Anticipations for inflation over the next three years also remained unchanged in July.
France's consumer confidence experienced a slight uptick in July ahead of the Olympic Games, as reported by the statistical office INSEE. The consumer confidence index rose to 91 from a revised 90 in June, although it remained below its long-term average. The index had been expected to increase to 90 from June's initially recorded 89.
In U.S. economic updates, the Commerce Department reported a 0.1% increase in its personal consumption expenditures (PCE) price index for June, following no change in May. The annual growth rate for the PCE price index slowed to 2.5% in June from 2.6% in May. Additionally, the core PCE price index, excluding food and energy, rose by 0.2% in June after a 0.1% rise in May. This figure matched economists' expectations. The annual growth rate of the core PCE price index remained steady at 2.6% in June, contrary to expectations of it slowing to 2.5%.
