European stocks on Friday logged their strongest weekly gains since November last year, with Germany’s DAX hitting a record on the back of better-than-expected economic data and encouraging earnings updates from chipmakers.
The pan-European STOXX 600 rose 0.7 percent to bring gains for the first week of this year to 3 percent, largely driven by hopes that a Democrat sweep of the US Senate would lead to a large US fiscal stimulus package.
That, along with optimism that the rollout of COVID-19 vaccines will fuel a strong global recovery, boosted US and Asian markets to all-time highs.
Europe’s STOXX 600 trades nearly 5 percent below its record hit in February last year.
Germany’s DAX outperformed, gaining 0.6 percent, after data showed that both industrial output and exports rose more than expected in November.
“Germany is the powerhouse in Europe. If you get data out with value, especially at these uncertain times, that is going to push prices up and that seems to be what is happening now,” ETX Capital analyst Michael Baker said.
A European Commission monthly survey showed that economic sentiment in the euro zone ticked up last month, but inflation held in negative territory, lending weight to expectations of loose monetary policy in the bloc.
Tech stocks topped sectoral gains as chipmakers Infineon Technologies AG, AMS AG and ASM International NV rose 1.6 to 6.9 percent after global peers Micron Technology Inc and Samsung Electronics Co Ltd reported strong earnings.
Franco-Italian chipmaker STMicroelectronics NV rose 1.9 percent after its revenue estimate for last quarter came in above the previous range.
Travel stocks got a boost after French catering and food services group Sodexo raised its margin outlook for the first half of this year.
Its shares jumped 10.5 percent to the top of STOXX 600, while peer Compass Group PLC gained 4.2 percent.
Economically sensitive miners surged 11.5 percent on the week, the best performance since April 2016, while oil and gas stocks were up 9.5 percent over the same period.
The UK’s FTSE 100, heavy on bank and commodity stocks, added just 0.2 percent to stand 6 percent higher on the week.
Retailer Marks & Spencer Group PLC slipped 2.4 percent after it reported another big fall in sales of clothing and homeware in the three months leading up to Christmas.
“It is very clear the gulf between the food business and the clothing and home unit is widening,” said David Madden, market analyst at CMC Markets UK.
Credit Suisse Group AG fell 3.6 percent after it forecast a net loss for its fourth quarter due to higher provisions for a long-running dispute in the US.
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