European shares climbed on Friday, wiping out earlier losses, after better-than-forecast US data stoked optimism about the health of the world’s biggest economy.
Retailers posted the best gains among industry groups, with Tesco PLC and Distribuidora Internacional de Alimentacion SA up more than 4 percent. Eutelsat Communications SA tumbled 28 percent, dragging media shares lower, after the French satellite operator cut its forecasts for this year and next. Peer SES SA slid 8.2 percent.
The STOXX Europe 600 gained 0.5 percent on Friday, erasing a decline of as much as 0.8 percent. A report on US consumer sentiment beat estimates, following data showing the biggest increase in retail sales in a year.
Stocks have struggled for direction after reaching a three-month high on April 20 amid mixed economic cues. Data earlier on Friday showed the euro-area economy grew slightly less than initially estimated, despite German growth that beat forecasts.
“On the surface US retail sales look surprisingly good, especially in the light of recent earnings from some of the retailers,” said Hugh Grieves, of the Miton Group in London.
“Investor confidence in the strength of the US consumer has been shaken recently, but this should give the market confidence that the economy is not entering a slow patch. This is only one data point and there have been many others that point the other way. We are not in the clear yet,” he said.
A rally that pushed the STOXX 600 up as much as 16 percent from a February low lost steam as concern resurfaced about global growth and analysts slashed profit estimates to forecast a contraction for this year. Buoyed by Friday’s advance, the STOXX 600 capped its first weekly advance in three, up 0.9 percent.
Frankfurt stocks rose 0.9 percent as data showed that the German economy grew by a better-than-expected 0.7 percent in the first quarter of this year.
Paris advanced 0.6 percent in value, aided also by separate figures showing the 19-member eurozone economy grew 0.5 percent in the same period.
London also managed a gain of 0.6 percent despite poor British construction data and after the IMF warned again of “significant downside risks” if British voters approve a EU exit in a June 23 referendum.
Additional reporting by AFP
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