European Markets Close Higher On Recovery Hopes

European markets closed higher on Friday with investors picking up shares amid optimism about economic recovery thanks to the momentum in vaccine rollouts and recent strong data out of the U.S.

Rising coronavirus cases across the continent and the European Commission’s warning that the European Union is at the start of a third wave of the pandemic rendered the mood somewhat cautious, but stocks still managed to find fairly decent support.

The positive trend in the U.S. market amid a rally in bank stocks after Federal Reserve Chairman Jerome Powell said lenders can resume buybacks and announce higher dividends once the stress tests on banks are over.

Higher crude oil prices pushed up energy stocks, contributing significantly to the positive close.

The pan European Stoxx 600 climbed 0.91%. The U.K.’s FTSE 100 moved up 0.99%, Germany’s DAX gained 0.87%, France’s CAC 40 ended up 0.61% and Switzerland’s SMI edged up 0.16%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden ended with strong gains. Turkey closed weak.

In the UK market, Smiths Group gained about 7% after reporting better-than-expected interim profit and issuing upbeat forecast for the second half of the fiscal year.

Glencore moved up 6.5%. Antofagasta, Anglo American, Evraz, Renishaw, Rio Tinto, BHP Group, Next and BP gained 3 to 4.5%. Royal Dutch Shell, Aveva Group, Associated British Foods, BT Group and Melrose Industries also rose sharply.

Standard Life, National Grid, Barratt Developments, Polymetal International, Bunzl and Intertek Group ended notably lower.

In the German market, Thyssenkrupp, Covestro, Fresenius, Deutsche Wohnen, Infineon Technologies and Fresenius Medical Care gained 2 to 5%.

In France, ArcelorMittal soared more than 8%. Technip gained about 4%, while Saint Gobain, Capgemini, STMicroElectronics, WorldLine and Legrand moved up 2 to 3%.

In economic news, German business confidence improved more than expected in March, survey results from the ifo Institute showed.

The business confidence index rose to 96.6 in March from revised 92.7 in February. The score was forecast to climb to 93.2.

The current conditions climbed to 93.0, which was above economists’ forecast of 91.3. Likewise, the expectations indicator advanced to 100.4 versus forecast of 95.0.

In the U.K., retail sales recovered in February largely driven by non-food store sales. Retail sales volume including auto fuel logged a monthly growth of 2.1%, in contrast to January’s 8.2% decrease. The pace of growth matched economists’ expectations.

On a yearly basis, retail sales fell at a slower pace of 3.7% after decreasing 5.9% in January. This was the second consecutive drop in sales and was better than the expected drop of -3.5%.