European markets ended Friday on a high note as notable markets hit new record highs. This follows encouraging economic data and growth forecasts, leading to renewed confidence from investors about forthcoming interest rate cuts by central banks.
This surge in investor sentiment was clearly visible in the Bank of England's decision to maintain current interest rates. Following their Thursday announcement, they hinted at potential rate cuts in the summer if inflation remained low.
Simultaneously, recent data released on the UK's GDP far exceeded expectations, showing the country had avoided a technical recession in the first quarter of this year. The improvement resulted from a recovery in the services sector and an increase in household spending.
According to preliminary data from the Office for National Statistics, the UK's GDP grew by 0.6% from the fourth quarter, beating the 0.4% growth prediction made by economists. This follows a 0.3% shrink in the economy in the preceding quarter.
The year-on-year GDP in the first quarter increased by 0.2%, overturning the expectation of stagnation.
Several European markets performed well as the Stoxx 600, FTSE 100, Germany's DAX, France's CAC 40, and Switzerland's SMI all ended the week with gains. Particularly, the FTSE 100 rose more than 2.5% over the week, while the DAX and CAC 40 witnessed respective gains of about 4.3% and 3.4%.
Other markets in Europe, including Austria, Belgium, Finland, Greece, Iceland, Netherlands, Norway, Portugal, Russia, Spain, and Sweden, also recorded an uptick. On the contrary, markets in Poland and Turkey weakened.
In the UK, companies such as St. James's Place, Spirax-Sarco Engineering, Standard Chartered, and Vodafone Group saw their shares go up by 1.5% to 3.2%. However, RightMove's shares fell sharply by about 5.5%, and Rolls-Royce Holdings finished with a 2.37% loss.
German firms like Siemens Energy, Fresenius Medical Care, and Munich RE experienced a significant increase in their shares. In the fashion e-commerce sector, Zalando saw a 3.3% stock increase following its stock rating upgrade to 'Buy' by Berenberg.
Meanwhile, in France, Teleperformance led the charge with a near 4% rally, followed by other key players like Legrand, Societe Generale, and Accor. Unfortunately, STMicroElectronics and Airbus Group ended the day with substantial losses.
