European equities on Friday posted their biggest weekly gain since early last month, capping a roller-coaster week, with Altice Europe NV and Aryzta AG jumping on takeover news.
The STOXX Europe 600 Index ended the session up 0.13 percent at 367.96, with a slump in banks and travel shares offset by a surge in mining stocks. The benchmark rose 1.67 percent on the week.
Deals were in focus after Next Private BV agreed to buy Altice, sending the shares 24 percent higher, while Aryzta said that it was in advanced talks with Elliott Management Corp about a potential takeover, with its shares rising more than 12 percent.
European stocks have been stuck in a narrow range since mid-June. The rising euro has acted as a headwind for their relative performance to global shares, and the currency resumed its surge against the US dollar after the European Central Bank (ECB) on Thursday said there was no need to intervene.
“The market remains highly sensitive in the short term and prone to unexpected and negative news,” Donner & Reuschel Privatbank technical analyst Martin Utschneider said. “This was also the case with yesterday’s ECB press conference. Hedges — stop loss or profit-taking — should therefore continue to be strictly maintained or adjusted.”
Meanwhile, London’s FTSE 100 ended Friday higher on gains in mining heavyweight Rio Tinto Group, and marked its best week in more than three months as a weaker pound benefited the exporter-heavy index.
The blue-chip FTSE 100 closed the day 0.48 percent higher at 6,032.09 and added 4.02 percent for the week, breaking a three-week losing streak.
Insurer Aviva PLC was the best performing blue-chip for the week after it said it would sell its Singapore business for S$2.7 billion (US$1.97 billion).
“The FTSE 100 has international horizons and the resulting weakness in the pound [from hard Brexit fears] has boosted the relative value of constituents’ overseas earnings,” AJ Bell investment director Russ Mould said.
Rio Tinto was the biggest boost to the index for the day after giving in to shareholder pressure to replace its chief executive over the destruction of two significant Aboriginal rockshelters.
Major miners rose on weakness in the pound and higher metal prices. The pound has come under pressure from increasing bets on a no-deal British exit from the EU.
Still, British stocks have lagged their peers in the developed world as middling economic data and an uptrend in local COVID-19 cases pushed them into a tight trading range since May.
A recent rout in US stock markets also extended to local equities, pressuring the FTSE 100 in particular.
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