A rally in mining shares on Friday lifted European shares, which still ended the week lower for the first time in six weeks due to persistent concerns about the economy, an ongoing US-China trade dispute and uncertainty over Brexit.
London’s blue-chip index, packed with companies whose revenues tend to rise when the British pound falls, led the gains, after the currency took a hit from the Bank of England’s first clear signal that it was considering an interest rate cut.
The FTSE 100 on Friday rose 75.13 points, or 1 percent, to 7,426.21, its highest in almost two months and a gain of 1.1 percent from a close of 7,344.92 on Sept. 20.
The pan-European STOXX 600 on Friday gained 1.58 points, or 0.4 percent, to 391.80, with the basic resources sector gaining 1.7 percent.
The STOXX 600 lost 0.3 percent from 392.95 on Friday last week as gains over the past two sessions failed to make up for losses earlier in the week, when poor business activity readings and dramatic twists in the saga of Britain’s exit from the EU dented sentiment.
Concerns about the economy resurfaced on Friday, with data showing plunging economic sentiment in the eurozone, but an increase in services sentiment was a bright spot, underlining that weakness in the manufacturing sector had not yet spread to services.
“That’s a positive sign. If you were looking for any sign of strength in the European economy, then the services sector is one to look for,” ING Groep NV senior economist for the eurozone Bert Colijn said in Amsterdam.
Osram Licht AG, up 5.4 percent, was among the biggest gainers on the pan-region index after Austrian sensor maker AMS AG raised its takeover offer for the German lighting group to 4.5 billion euros (US$4.9 billion).
Hopes for a quick resolution to the US-China trade war also hung over the market, with CNBC reporting that talks are scheduled to begin on Oct. 10.
However, shares of semiconductor companies Infineon Technologies AG, AMS and ASM International NV came under pressure after Micron Technology Inc forecast first-quarter profit below Wall Street targets.
Defensive sectors — healthcare, real estate and utilities — were the only decliners among major European sectors on Friday.
However, all three ended with gains over the week as profit warnings from European companies this week have fueled fears of a recession.
For the week to come, purchasing managers’ index data for the eurozone manufacturing and services sectors for this month, as well as retail sales last month, will be closely watched.
A WTO decision expected tomorrow on whether to officially authorize US tariffs on European imports due to illegal state aid provided to Airbus SE will also be watched.
Additional reporting by staff writer
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