On Friday, European stock markets saw an increase due to indications of a declining U.S. labor market, sparking hopes that the Federal Reserve could potentially reduce interest rates in September or November. The markets were also stimulated by the Bank of England’s cautious decision to maintain interest rates on Thursday, combined with an unexpected boost in U.K. GDP growth.
The Bank of England signaled that should inflation remain low, they are likely to reduce rates during the summer. This, in conjunction with data revealing that the U.K. economy pulled out of a technical recession in the first quarter due to a rally in services output and household spending, caused the British pound to strengthen against other major currencies.
According to the Office for National Statistics, the U.K.’s GDP grew by 0.6 percent from the fourth quarter, reversing a 0.3 percent contraction. There was also a decrease of 0.1 percent in the third quarter of last year. Market analysts had predicted a 0.4 percent growth for the first quarter, while GDP rose by 0.2 percent year-on-year in the initial quarter, surpassing expectations of a standstill.
European indices felt the effects with the pan European STOXX 600 witnessing a 0.9 percent rise to 521.15, following a 0.2 percent increase in the previous session. Germany's DAX, France's CAC 40, and the U.K.'s FTSE 100 all registered growth around 0.8 percent.
Higher prices for metal and oil proved beneficial for miners and energy stocks, with Anglo American, Antofagasta, and Glencore growing around 2 percent, while BP Plc saw a 1.2 percent increase and Shell saw a hike of 1 percent.
Building materials provider, CRH, saw an impressive 4 percent rise after confirming its predictions for the full-year. Irish homebuilder, Cairn Homes, saw a surge of 2.5 percent with their claims of a continued high demand for their well-positioned, energy-efficient homes across all tenure types.
German online retailer, Zalando, experienced a 2.6 percent boost as Berenberg updated its rating for the stock from "hold" to "buy."
