European markets closed on a strong note on Friday, shrugging off data showing the U.K. economy expanded at a slower pace in May, and riding on gains in travel-related stocks and miners.
Stocks found support as Treasuries halted an eight-day rally fueled by concerns about global growth amid the spread of Covid-19 variants.
Investors shifted their focus to the meeting of G-20 finance ministers and central bank governors in Venice, Italy today and tomorrow, with global tax reform on top of the agenda.
Travel stocks rallied after the UK government said that from July 19, fully vaccinated U.K. residents and children will no longer have to quarantine on their return to England.
The pan European Stoxx 600 gained 1.34%. The U.K.’s FTSE 100 climbed 1.3%, Germany’s DAX surged up 1.73% and France’s CAC jumped 2.07%, while Switzerland’s SMI gained 0.55%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkey closed with sharp to moderate gains, while Denmark and Russia edged down marginally.
In the UK market, Evraz climbed 5.5%. Burberry Group gained about 4% after Goldman Sachs upgraded the stock to “buy.”
BHP Group, Anglo American Plc, Rio Tinto, Glencore, ICP, Bunzl, Barclays Group, Legal & General, Land Securities, Taylor Wimpey and Natwest Group gained 3 to 4.5%. Prudential and Lloyds Group also ended sharply higher.
Just Eat Takeaway ended more than 4% down. Rentokil Initial shed about 1.4%.
In France, ArcelorMittal rallied more than 5%. Airbus Group gained nearly 4% after it reported a 52% jump in jet deliveries in the first half of 2021.
Faurecia, STMicroElectronics, LVMH, Societe Generale, Unibail Rodamco, Bouygues, Michelin, Atos, Credit Agricole, Valeo, Safran, Kering, Saint Gobain, Thales and BNP Paribas gained 2 to 4%.
In the German market, Volkswagen climbed nearly 6%. MTU Aero Engines, Thyssenkrupp, Covestro, BMW, Daimler, BASF, Deutsche Bank, Munich RE, Linde, Lufthansa, HeidelbergCement, Allianz, Fresenius, Adidas and Vonovia gained 1.5 to 4%.
U.K.’s gross domestic product grew 0.8% month-on-month in May, but slower than the revised 2% growth posted in April and the economists’ forecast of +1.5%. Nonetheless, GDP rose for the fourth straight month.
The UK visible trade deficit narrowed to an 11-month low in May, the Office for National Statistics reported Friday.
The trade in goods resulted in a shortfall of GBP 8.48 billion in May compared to a GBP 10.95 billion deficit in the previous month. This was the lowest shortfall since June 2020 and also smaller than the expected level of -GBP 11.1 billion.
Exports of goods grew at a faster pace of 7.1% in May, while imports dropped 1.4% from the previous month. At the same time, the surplus on services trade remained broadly unchanged at GBP 9.4 billion in May, data showed.
As a result, the total balance showed a surplus of GBP 884 million versus a deficit of GBP 1.59 billion in April.
The UK economy is set to grow at a slower pace in the third quarter, the think tank NIESR said.
“With catch-up potential still evident in hospitality, transport, business support and the arts, we forecast growth of 1.9% in the third quarter, still notably above historical trend growth rates,” the NIESR said in its latest monthly GDP tracker report. The institute had predicted 4.8% growth for the second quarter and 0.9% for June.
Market Analysis
European Markets Close On Strong Note
2021-07-09 18:03:14
