European shares rose on Friday as industrial and financial stocks gained on China-led optimism, but recession worries ahead of a slew of central bank decisions dragged the STOXX 600 index to a weekly loss after a seven-week rally.
The STOXX 600 closed 0.8 percent higher, at 439.13, snapping a five-day losing streak that was largely driven by concerns about an impending global recession due to sharp interest rate increases by global central banks. The index was down 0.94 percent from a week earlier.
The FTSE 100 on Friday gained 0.06 percent to 7,476.63, but lost 1.05 percent from a week earlier.
Data on Thursday showing a rise in US weekly jobless claims raised hopes that the US Federal Reserve could temper its aggressive stance on interest rate hikes, with China’s easing of its strict COVID-19 prevention measures also aiding sentiment.
The next week would be crucial, with rate decisions due from the Fed, the Bank of England and the European Central Bank (ECB).
The ECB might raise rates by 50 basis points next week, a Reuters poll showed, following two straight 75 basis point increases.
Photo: REUTERS
“It’s uncertainty as to what central banks are likely to do in the new year, not next week, that’s prompting a little bit of caution given that most of the economic data that we’re seeing indicate that we are going to see a bit of a slowdown in economic activity,” CMC Markets chief market analyst Michael Hewson said.
Industrial stocks such as Siemens AG and Schneider Electric SE were among the biggest boosts to the index, while China-exposed stocks such as Prudential PLC rose 3.0 percent.
Lenders snapped their four-day losing streak and advanced 0.9 percent, as eurozone banks are set to repay another 447.5 billion euros (US$471.7 billion) in multiyear loans from the ECB, bringing the total paydown to nearly 800 billion euros in just a few weeks, the ECB said.
Credit Suisse jumped 6.8 percent after the embattled bank on Thursday hailed a “milestone” in its turnaround plan after raising 2.24 billion Swiss francs (US$2.39 billion) as part of a SF4 billion cash call.
Vestas A/S gained 6.4 percent as the Danish wind turbine maker announced new orders and UBS raised its price target.
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