European shares rose on Friday and logged their first monthly gain in four months as a host of solid earnings from corporate Europe overshadowed fears of a global recession, with some positive economic data also lending support.
The pan-European STOXX 600 was up 1.28 percent to a near two-month high of 438.29, and logged its best monthly performance since November 2020. It posted a weekly gain of 2.96 percent.
Boosting sentiment, the eurozone economy grew much faster than expected in the second quarter, with gross domestic product rising 0.7 percent quarter-on-quarter in the April-to-June period for a 4 percent year-on-year gain, strongly beating expectations of a 0.2 percent quarterly and 3.4 percent annual gain.
However, inflation this month rose to another record high, with consumer price growth accelerating to 8.9 percent in the month from 8.6 percent a month earlier, far above expectations for 8.6 percent and well clear of the European Central Bank’s 2 percent target.
“The picture still looks patchy, with uneven dynamics in terms of consumption and investment — we still expect a material deterioration in the outlook in Q3 and a mildly negative print in Q4,” Morgan Stanley economists and strategists wrote in a note.
“Underlying inflationary pressure remains strong and we expect further increases in the coming months... We see mounting headwinds from slowing growth and falling input cost pressures,” they wrote.
Meanwhile, data on Thursday showed that the US economy shrank for a second straight quarter.
Worries about a recession have led to scaled down bets of central bank policy tightening, with money markets now pricing in a roughly 44 percent chance of a 50 basis-point hike by the European Central Bank in September, compared with a 50 percent chance earlier this week.
Oil stocks led gains after crude prices jumped more than US$4 a barrel as attention turned to next week’s OPEC+ meeting.
The UK’s blue-chip FTSE 100 rose on Friday, marking its best monthly performance since December last year, as a jump in commodities and a slew of upbeat earnings reports from companies like NatWest outweighed economic slowdown worries.
The index gained 1.06 percent to 7,423.43, rising 2.02 percent from a week earlier.
NatWest rose 8.1 percent after the bank raised its full-year forecast and made a bumper payout to shareholders, lifting the banking index 1.5 percent higher.
“The sector’s earnings so far have benefited from the rising rate environment and volatile financial markets that have boosted trading activity,” said Victoria Scholar, head of investment at Interactive Investor.
However, she added that there were concerns for financial stocks due to the shaky British macroeconomic outlook for the second half.
The London Metal Exchange (LME) discovered bags of stones instead of the nickel that underpinned a handful of its contracts at a warehouse in Rotterdam, the Netherlands, in a revelation that would deliver another blow to confidence in the embattled exchange. The amount of metal represents just 0.14 percent of live nickel inventories on the LME, worth about US$1.3 million at current prices, so the immediate effect on the metals markets is limited. However, the shock announcement has much wider implications. In an industry riddled with scandals, the LME’s contracts are viewed as unquestionably safe. The news that even a few of
Oil on Friday posted its worst weekly loss since the early months of the COVID-19 pandemic as banking turmoil poisoned investor sentiment. West Texas Intermediate for April delivery dropped 2.36 percent to US$66.74 per barrel, falling 12.96 percent for the week, the largest drop in almost three years. Brent crude for May delivery fell 2.32 percent to US$72.97, posting a weekly loss of 11.85 percent. The failure of Silicon Valley Bank and troubles at Credit Suisse Group AG drove investors from risk assets, with oil-options covering accelerating the sell-off. “Crude action this week reminded many of how quickly the commodity can be decimated by
Singapore pushed New York off the top spot for the strongest growth in residential rents in the final quarter of last year, fueled by a supply crunch and strong demand. The city-state saw annual rents jump 28 percent in the quarter from a year earlier, Knight Frank said in a report. New York followed with 19 percent growth, while London and Toronto took the third and fourth spots, a survey of prime residential rents across 10 cities showed. Singapore’s soaring rents — driven partly due to a lack of supply of new housing during the COVID-19 pandemic — have been a source of
US-based mobile chip designer Qualcomm Inc yesterday opened a manufacturing engineering and testing center in Hsinchu, expanding its presence in Taiwan. Qualcomm also expects to accelerate its purchases in Taiwan, which already rose to NT$240 billion (US$7.9 billion) last year, up from NT$90 billion five years earlier, and should hit NT$300 billion next year. The center is to provide services for the supply chain in the semiconductor industry, Roawen Chen (陳若文), senior vice president and chief supply chain and operations officer of Qualcomm, said at the facility’s inauguration ceremony. It is Qualcomm’s largest and most advanced engineering testing center outside of the company’s
RSS