European stocks concluded Friday on a positive note as investors assessed eurozone inflation data and a U.S. report on personal income and spending, while anticipating the European Central Bank's monetary policy announcement next week.
The pan-European Stoxx 600 rose by 0.32%. London's FTSE 100 gained 0.54%, France's CAC 40 edged up by 0.18%, Germany's DAX barley moved rising by 0.01%, and Switzerland's SMI jumped 1.1%.
Elsewhere in Europe, markets in Austria, Belgium, Denmark, Iceland, Norway, Poland, Portugal, and Sweden also posted solid gains, with Finland showing a marginal increase. Conversely, Greece, the Netherlands, Russia, Spain, and Turkey closed on a weaker note.
In the UK stock market, National Grid Plc (new) shares surged nearly 27%, while National Grid (ord) increased by 4.7%. Other notable gainers included SSE, Severn Trent, GSK, Reckitt Benckiser, IHG, Centrica, Smith (DS), Whitbread, BT Group, BAE Systems, AstraZeneca, United Utilities, Beazley, Pearson, Rentokil Initial, Vodafone Group, British American Tobacco, and Diageo, which all advanced by 1% to 2.3%.
JD Sports Fashion faced a substantial drop of 4.7% after reporting lower-than-expected full-year profits, while Associated British Foods decreased by 4.1%. Ocado Group fell by over 2.5%. Other decliners included Burberry Group, Spirax-Sarco Engineering, Bunzl, Airtel Africa, RightMove, Fresnillo, ICG, RS Group, M&G International, and Croda International, which lost between 1% to 2%.
In Germany, Vonovia, Rheinmetall, Deutsche Boerse, Hannover Rueck, Deutsche Telekom, Merck, Allianz, and Porsche posted gains ranging from 1% to 2.1%. However, Siemens Energy dropped nearly 5%, and SAP, Deutsche Bank, Commerzbank, MTU Aero Engines, and HeidelbergCement saw declines of 1% to 2%.
In the French market, TotalEnergies and Edenred both gained approximately 2.5%. L’Oreal, Teleperformance, Thales, Unibail Rodamco, Sanofi, Engie, ArcelorMittal, and Vivendi rose by 1% to 2%. Capgemini, however, tumbled by 4.4%, while Legrand and Airbus Group dropped by 2.6% and 2%, respectively. STMicroElectronics faced a decline after announcing plans to build a new manufacturing facility in Catania, Italy, for the mass production of 200mm silicon carbide (SiC) wafers. Renault closed lower after revealing a joint venture with China’s Geely for hybrid combustion engines. Dassault Systemes, Stellantis, and Accor also ended in negative territory.
On the economic front, eurozone headline and core inflation accelerated in May, largely driven by higher services costs ahead of the ECB's governing council meeting next week, where an interest rate cut is widely anticipated. The harmonized index of consumer prices posted a faster-than-expected increase of 2.6%, following a 2.4% rise in April, according to flash data from Eurostat.
In France, consumer price inflation remained steady in May, matching the 2.2% year-over-year increase recorded in April, as reported by INSEE. However, economists had forecast a rise to 2.4%. The French economy grew by 0.2% in the first quarter, consistent with initial estimates, while fourth-quarter growth was revised upwards to 0.3%.
France also saw payroll employment rise more than initially estimated in the first quarter, with a 0.3% sequential increase, according to INSEE's final data. Meanwhile, Germany’s retail sales slumped by 1.2% month-over-month in April, following a revised 2.6% growth in March, as reported by Destatis. This decline was steeper than the anticipated 0.2% drop, with a year-over-year decrease of 0.6%.
Germany's import prices fell by 1.7% year-over-year in April, though this was slower than the 3.6% decline recorded in March, as per Destatis data. The expected decrease was 1.8%.
In the UK, mortgage approvals saw a slight decrease in April, and households made record deposits in individual savings accounts (ISAs) to take advantage of higher interest rates, according to the Bank of England. The number of mortgage approvals edged down to 61,100 from 61,300 in March, contrary to the forecast of a rise to 61,500.
