European stocks posted their first full-weekly gain of the year, as data showed that US and German unemployment fell, and Ireland returned to the bond market after completing a bailout program.
A gauge of lenders posted its biggest weekly advance in more than eight months, as Ireland’s bond sale sent European borrowing costs lower, with Bank of Ireland soaring 19 percent in Dublin.
Meanwhile, Air France-KLM Group jumped 16 percent, while Deutsche Lufthansa AG added 13 percent after reporting that passenger traffic rose last month.
The week was not as good for Wm Morrison Supermarkets PLC, which had its worst week since May 2010 after forecasting that its annual profit will be at the lower end of analysts’ estimates.
The STOXX 600 climbed 0.7 percent to 329.95 — its highest level since May 2008 — in its first full week of the year. The gauge rose 17 percent last year, which was its best year since 2009, as the European Central Bank (ECB) said it would keep interest rates low for an extended period and investors bet that the US economic recovery is strong enough to withstand a reduction in US Federal Reserve stimulus.
National benchmark indices rose in all 18 Western European markets except Iceland this week. The UK’s FTSE 100 gained 0.1 percent, Germany’s DAX added 0.4 percent, the CAC 40 rose 0.1 percent in Paris and the IBEX 35 rallied 5 percent in Madrid to reach its highest level since July 2011.
The average daily volume this week on the STOXX 600 across all exchanges was 15 percent higher than the average of the past 12 months, data compiled by Bloomberg show.
The STOXX 600 Banks Index posted the biggest increase of the 19 industry groups in the STOXX 600, rising 4.7 percent.
Ireland returned to debt markets with the sale of a 10-year bond after completing its international bailout last month. The nation raised 3.75 billion euros (US$5.1 billion) in Tuesday’s auction, exceeding its minimum target. Portugal followed two days later with a 3.25 billion euro five-year bond sale that attracted 11 billion euros of bids.
Data this week showed that unemployment in Germany fell for the first time in five months last month, while the adjusted jobless rate was steady at 6.9 percent.
ECB President Mario Draghi on Thursday reiterated a pledge to keep interest rates low as he warned that it is too soon to say the eurozone is out of danger and after the bank left the main refinancing rate at 0.25 percent.