European shares edged up on Friday, helped by a solid update from luxury group LVMH Moet Hennessy Louis Vuitton SE, but not enough to counter the effects of a rising euro, which spoiled a strong start to the year and left them broadly flat over the week.
The euro was up on Friday, though below the December 2014 high it hit on Thursday, after US President Donald Trump said he wanted a “strong dollar,” contradicting earlier comments made by US Secretary of the Treasury Steven Mnuchin, which sent the US dollar plunging.
“The traffic light for dollar sellers is a bit less green,” said Anthilia Capital fund manager Giuseppe Sersale.
A strong euro hurts European exporters whose products become less competitive against rivals producing in a weaker currency.
The STOXX 600 closed up 0.5 percent, recovering from a one-week low hit in the previous session.
The pan-European index is down 0.1 percent on the week, but still up 2.9 percent since the beginning of the year, the past weeks being buoyed by optimism over Europe’s economic and corporate earnings recovery.
LVMH rose 4.9 percent after the world’s biggest luxury goods maker reported higher sales and profits and said it had made a favorable start to the year.
“The outlook for 2018 remains constructive, reflected in what was ... a confident conference call and on account of a good entry speed into the year,” Deutsche Bank AG said in a note.
It buoyed shares of other luxury goods companies. Christian Dior SE and Kering SA were up 4.2 and 2.6 percent respectively.
Swiss banking software group Temenos Group AG ended down 3.3 percent, but was the biggest gainer in Europe before it denied being approached for a takeover.
The Swiss software firm, which is subject to regular takeover speculation, jumped as much as 18 percent on Thursday.
Kepler Cheuvreux on Friday raised its price target on Temenos, pointing to positive comments by Nordic bank Nordea Bank AB regarding the integration of a Temenos banking platform.
Among other gainers were Telia Mobile, up 3.8 percent, after the telecom operator lifted its dividend, while shares in Michelin Co and Thales SA were buoyed by upbeat broker comments.
A disappointing update however sent Norwegian insurer Gjensidige Forsikring ASA down 6.6 percent.
The company posted below-forecast profits for the fourth quarter of last year and proposed a lower-than-expected full-year dividend.
Speciality baker Aryzta AG fell 8.8 percent as some brokers downgraded the stock following a profit warning that wiped out one-fifths of its market value on Thursday.
Eighty percent of the MSCI Europe companies that have reported so far have beaten fourth-quarter earning expectations and 12 percent have missed them, according to Thomson Reuters data.
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