European Markets Close Higher On Recovery Hopes

European markets closed higher on Friday amid optimism about economic recovery after positive euro zone PMI data and U.K. retail sales numbers.

According to flash survey data from IHS Markit, the euro area private sector activity grew the most in more than three years in May as economies continued to open up from virus restrictions. The composite output index rose to 56.9 from 53.8 in the previous month. The score was expected to climb moderately to 55.1.

U.K. retail sales expanded 9.2% month-on-month in April, faster than the 5.1% increase in March and the economists’ forecast of +4.5% as non-essential stores reopened, official data showed. This was the biggest increase since June 2020, when sales were up 13.9%.

On a yearly basis, retail sales volume grew sharply by 42.4%, after rising 7.2% in March.

Earlier in the day, survey results from the market research group GfK showed that confidence among consumers bounced back to its pre-lockdown level in May. The consumer sentiment index rose six points to -9 in May.

Separately, IHS Markit said that U.K. private sector is growing at its fastest pace in at least two decades this month.

The pan European Stoxx 600 climbed 0.57%. Germany’s DAX gained 0.44%, France’s CAC 40 surged up 0.68% and the U.K.’s FTSE 100 edged down 0.02%. Switzerland’s SMI ended 0.66% up.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Ireland, Netherlands, Norway, Poland, Russia and Spain ended higher.

Greece and Portugal drifted lower, while Sweden and Turkey closed flat.

In the French market, Valeo moved up more than 2%. Airbus Group, Hermes International, Total, Saint Gobain, Faurecia, Bouygues, Orange, Danone and Essilor gained 1 to 1.6%.

Sodexo declined more than 2.5%, while Carrefour, Atos, Capgemini and Teleperformance lost 0.3 to 1%.

In Germany, Continental and Deutsche Bank both ended higher by nearly 2.5%. Adidas, Deutsche Telekom, Munich RE, Deutsche Post, Siemens and Allianz closed with moderate gains.

BMW ended higher after saying it expects an antitrust fine from the European Union will be much smaller than anticipated two years ago.

Lufthansa ended more than 6% down after the Thiele family, the second-largest shareholder in the company, sold more than half its stake in the airline group. Covestro, Thyssenkrupp and Fresenius Medical Care lost 1 to 1.4%.

In the Switzerland market, Richemont shares moved up sharply after the luxury goods maker said it will double its dividend.