Britain’s FTSE 100 on Friday closed higher, with healthcare and energy stocks leading as drugmaker GSK PLC rose, while data showed that the British economy grew slightly in the first quarter of the year.
European shares also rose on upbeat results from luxury major Compagnie Financiere Richemont SA and gains in energy stocks, while investors assessed inflation data from France and Spain for signals about the European Central Bank’s (ECB) plans on interest rate hikes.
The blue-chip FTSE 100 rose 0.31 percent to 7,754.62, snapping a three-day losing streak.
GSK added 1.8 percent after the drugmaker said a Canadian provincial supreme court dismissed a proposed class action against heartburn drug Zantac over increased cancer risk.
A British Office for National Statistics report showed that the economy grew sluggishly early in the year, better than the shallow recession once expected, but an unexpectedly sharp drop in output in March underscored how fragile its recovery remains.
“The GDP [figure] today is not sending out a good signal,” HYCM chief market analyst Giles Coghlan said.
Photo: Reuters
“Even though there’s some confusing input points that allow enough room to overlook this initial print, it will put more pressure on the prints to come,” he said.
British banks recovered from Thursday’s losses, gaining 0.5 percent a day after the country’s central bank lifted borrowing costs.
Morgan Stanley and Bank of America Corp raised their terminal rate forecasts, with both expecting one more interest hike from the Bank of England next month.
Energy stocks rose 0.9 percent, as oil prices rebounded after Thursday’s fall.
The mid-cap FTSE 250 fell 0.4 percent to 19,188.37.
Both London-based indices end the week lower, with the FTSE 100 falling 0.31 percent to log a third straight weekly drop, its longest streak of weekly losses in seven months. The FTSE 250 fell 1.36 percent for the week.
The pan-European STOXX 600 closed 0.4 percent higher at 465.49, gaining 0.04 percent from the previous week.
The benchmark index has traded in a tight range in the past few weeks as investors remain concerned about the possibility of a US recession and further rate hikes from the ECB.
Richemont rose 3.5 percent, after touching a record high in early trading, as the luxury goods group beat expectations after strong demand from Chinese consumers for jewelry and watches boosted net profit and sales in the 12 months through March.
“Luxury is doing very well because the Chinese story is more about domestic recovery, not so much manufacturing. What we’re getting out of China and the way it affects the European market is very uneven,” said Anthi Tsouvali, a multiasset strategist at State Street Global Markets.
“Within Europe, we’re more positive on defensive sectors versus cyclicals,” she said.
Meanwhile, data showed that Spanish national consumer prices rose 4.1 percent in the 12 months through last month, while French inflation rose 6.9 percent — both in line with economists’ estimates.
The ECB’s latest interest rate hike would not be the last as it needs to ensure the current wave of inflation comes to an end, ECB policymaker Deutsche Bundesbank President Joachim Nagel said.
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