European Shares Rise On US Economic Optimism

European stocks advanced on Friday as recent strong U.S. data raised hopes a recession can be avoided.

However, amid much uncertainty over the future trajectory of the Federal Reserve’s rate hikes, investors looked ahead to the release of the Fed’s preferred inflation tool later in the day for further direction.

The pan-European STOXX 600 was up 0.3 percent at 463.90 after ending flat with a positive bias on Thursday.

The German DAX edged up 0.1 percent, while France’s CAC 40 index and the U.K.’s FTSE 100 were up around 0.3 percent each.

British Airways-owner IAG tumbled 3.3 percent as it announced a deal for the remaining shares in Air Europa it did not already own.

Jupiter Fund Management soared 14 percent after recording positive net inflows in the last six months of 2022.

Saint-Gobain jumped nearly 6 percent in Paris. After posting record annual revenue, the building materials firm said it would allocate at least 400 million euros for share buybacks in 2023 in line with the objectives set out in its “Grow & Impact” plan.

German chemical maker BASF slumped 5.5 percent after it slipped to a loss in the fourth quarter of 2022 and announced plans to sack 2,600 employees, around 2 percent of its workforce.

In economic releases, data showed Germany’s consumer sentiment is set to strengthen for the fifth month in a row in March amid lower energy prices.

The forward-looking Consumer Confidence Index for March rose to -30.5 points from a revised -33.8 points in February, the Nuremberg based GfK said. Economists had forecast a reading of -30.4.

Separate data released by the statistical office Destatis revealed that the German economy shrank more than initially estimated in the fourth quarter of 2022.

Gross domestic product decreased 0.4 percent quarter-on-quarter, which was a more severe fall than the 0.2 percent estimated initially.

France’s consumer confidence dropped slightly in February, reflecting moderate weakness in households’ assessment about financial situation, survey results from the statistical office INSEE showed.

The consumer confidence index fell to 82 in February from revised 83 in January. The score was forecast to fall to 80.

Elsewhere in the U.K., a survey showed British consumer confidence rebounded in February to its highest level in almost a year.

Research group GfK said its index of consumer confidence, a closely watched measure of how people view their personal finances and the economic outlook, rose by seven points to -38. This is the highest reading since April 2022 for the index.

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