European Stocks Close Higher On Continued Optimism About Economic Recovery

European stocks closed higher on Friday amid rising optimism about global economic recovery thanks to upbeat economic data from the U.S.

Relaxations in coronavirus restrictions in several places in the U.S. and Europe following an acceleration in vaccination drive contributed as well to the positive mood in the markets.

Markets also reacted positively to reports that said U.S. President Joe Biden will seek $6 trillion in federal spending plans for 2022.

The pan European Stoxx 600 climbed 0.57%. Germany’s DAX surged up 0.74%, France’s CAC 40 gained 0.75%, while the U.K.’s FTSE 100 edged up 0.04%. Switzerland’s SMI ended 0.76% up.

Among other markets in Europea, Austria, Belgium, Denmark, Finland, Greece, Netherlands, Norway, Poland, Spain, Sweden and Turkey closed higher.

Czech Republic, Iceland, Ireland, Portugal and Russia drifted lower.

In the UK market, Taylor Wimpey, Croda International, Persimmon, Barratt Developments and Scottish Mortgage gained 2.3 to 2.6%. Berkeley Group Holdings, Burberry Group, Melrose Industries, HSBC Holdings, Standard Chartered, ICP and Bunzl also rose sharply.

On the other hand, Antofagasta, Evraz, Ashtead Group, Ocado Group, Polymetal International, Fresnillo and British American Tobacco lost 1.7 to 2.2%.

In the French market, Air France-KLM climbed more than 2.5%. Kering, AXA, LOreal, Credit Agricole, WorldLine, STMicroElectronics, Safran, Sanofi and Airbus gained 1 to 2%.

In Germany, Siemens surged up more than 3.5%. Lufthansa, Infineon Technologies, Merck, MTU Aero Engines, Munich RE, BASF, Allianz, SAP and Deutsche Bank closed with sharp to moderate gains.

Daimler, BMW, Deutsche Post, Fresenius Medical Care and Thyseenkrupp closed weak.

In economic releases, the European Commission’s economic sentiment index strongly to 114.5 in May, up from 110.5 in April, and above expectations for a score of 112.1.

France’s consumer price inflation accelerated to 1.4% in May from 1.2% in April, flash data from statistical office Insee revealed.

The rate came in line with economists’ expectations and a similar higher rate was last reported in February 2020.

The French economy contracted 0.1% in the first quarter of 2021, revised official data showed, marking a slip into recession as construction had fared worse than previously estimated.

Germany’s import prices increased at the fastest pace in more than a decade in April, growing 10.3% year-on-year, following a 6.9% rise in March, data released by Destatis showed on Friday.

On a monthly basis, import price inflation slowed to 1.4% from 1.8% in the prior month. The rate was forecast to slow to 1.1%.

Switzerland’s economic outlook remained very positive in May, driven by manufacturing and exports, survey data by the KOF economic institute showed Friday.

The KOF Economic Barometer climbed to a new record high of 143.2 point from 136.4 in April, which was revised from 134.0. Economists had forecast a score of 136. The reading is well above its long-term average.

In news from U.S. an inflation reading preferred by the Federal Reserve showed an acceleration in the pace of price growth but not as much as traders had feared.

The reading on core consumer prices showed the pace of price growth accelerated to 3.1% in April from 1.9% in March.

The Fed has attributed the recent increase in prices to “transitory factors” and has repeatedly hinted that it will not consider tightening until prices exceed 2% for “some time.”

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