Major European Markets Close Slightly Higher

Despite struggling for direction for much of the day’s trading session, the major European markets managed to close slightly higher on Friday, with banks outperforming and posting impressive gains.

But most of the other markets in the region closed weak as the mood was cautious amid lingering worries about economic slowdown.

In addition to the latest batch of economic data from the region, markets digested the Bank of Japan’s decision to tweak its yield curve control policy to allow long-term yields to move 0.5% in both directions.

The U.K.’s FTSE 100 edged up 0.02%, Germany’s DAX climbed 0.39% and France’s CAC 40 advanced 0.155. Switzerland’s SMI dropped 0.49%, and the pan European Stoxx 600 ended 0.2% down.

Among other markets in Europe, Austria, Belgium, Denmark, Greece, Iceland, Norway, Portugal and Spain ended weak.

Czech Republic, Netherlands, Russia and Turkiye closed higher, while Finland, Ireland, Poland and Sweden settled flat.

In the UK market, IAG rallied more than 6.5% thanks to stronger than expected quarterly results. Standard Chartered gained about 4% after posting better-than-expected first-half earnings and announcing a new $1 billion share buyback.

AstraZeneca gained 2% after the drug maker delivered better-than-expected profits and sales in the second quarter.

Natwest Group climbed 2.3% after reporting a jump in first-half profit, benefiting from higher interest rates.

Airtel Africa, Intertek Group, Ocado Group, Rolls-Royce Holdings, JD Sports Fashion, RightMove, Croda International, Unilever and Scottish Mortgage also posted strong gains.

Admiral Group ended more than 5% down, and St. James’s Place declined 4.8%. Beazley ended lower by 3.4%.

Segro, Aviva, Kingfisher, Land Securities Group, Anglo American Plc, Informa, Rio Tinto, GSK, Hiscox and Experian lost 1.4 to 2.5%.

In the German market, BASF surged more than 3%. Porsche gained about 2.2%, while HeidelbergCement, Adidas, Beiersdorf, Brenntag, Deutsche Boerse, BMW, Infineon and Mercedes-Benz ended higher by 1 to 1.8%.

RWE dropped 2.3%. Sartorius, Siemens Healthineers and Fresenius Medical Care lost 1.6 to 2%.

In Paris, Bouygues rallied more than 4%. Hermes International gained nearly 4% and Teleperformance moved up 3.2%.

Stellantis, Edenred, L’Oreal, Safran, Airbus Group, Credit Agricole, Essilor, Air Liquide and Michelin gained 1 to 2.5%.

Capgemini plunged 7%. After posting higher half-year sales, the IT consulting group said it would invest 2 billion euros ($2.19 billion) in AI over three years.

STMicroElectronics fell 4%, Sanofi lost 2.8% despite lifting its earnings outlook, and Engie ended lower by 2%.

Carrefour, Alstom, Schneider Electric, WorldLine and Kering also ended notably lower.

In economic news, official data showed that the German economy stabilized in the second quarter after two consecutive contractions. GDP remained flat in the second quarter, following a 0.1% drop in the first quarter and 0.4% decline in the fourth quarter of 2022, Destatis reported. GDP was expected to climb 0.1%.

The French economy grew more than expected in the second quarter, underpinned by a rebound in exports while consumption decreased, and investment growth was modest, preliminary data from the statistical office INSEE showed.

Gross domestic product rose 0.5% from the first quarter, when the second biggest economy in the euro area expanded 0.1%, which was revised down from 0.2%.

Germany’s consumer price inflation eased in July after accelerating in the previous month, mainly due to slower growth in food prices and services, preliminary data from the statistical office Destatis showed Friday.

The consumer price index rose 6.2% year-on-year following a 6.4% increase in June. That was in line with economists’ expectations.

Separate data from the European Commission revealed that confidence among business and consumers declined further in the euro zone in July.

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