European markets closed higher on Friday as investors reacted to economic data and corporate earnings and tried to assess the course of monetary policy.
The Stoxx 600 closed up 0.4%, with travel and leisure stocks up 2.4% as most major sectors and stock exchanges closed in positive territory.
The pan-European benchmark index had a good week overall, rising nearly 3%.
The European Central Bank on Thursday announced a 50 basis point interest rate hike, its first increase in 11 years, as concerns regarding hyperinflation overshadowed fears of slowing growth caused by the Russian war in Ukraine.
The European Central Bank also introduced the Protection Instrument (TPI), a bond protection scheme designed to reduce borrowing costs across the region for heavily indebted countries in southern Europe.
On the economic data front, Friday’s PMI readings showed that business activity in the euro zone unexpectedly contracted in July, as the pace of contraction in manufacturing accelerated and service sector growth slowed, with rising costs forcing consumers to cut spending. .
The composite PMI, which includes both manufacturing and services, came in at 49.4, below the 50 level that separates activity growth from contraction.
The weak data, combined with similar readings from Germany and France separately, dragged down European bond yields.
In the UK, the composite reading came in at 52.8, slightly below expectations of 53.0 and down from 53.7 in June.
Official figures showed that UK retail sales fell 0.1% in June, while the 0.5% monthly decline in May was revised from 0.5% to 0.8%.
PARIS (Archyde.com) – France’s economic growth will slow sharply next year as geopolitical risks mount, delaying progress on the public sector budget deficit, the French finance ministry said on Thursday.
The ministry now expects growth in the eurozone’s second-largest economy to slow from 2.5% in 2022 to 1.4% in 2023.
And in Italy, the political uncertainty in Italy shows no sign of abating, with snap national elections scheduled for September 25 following Prime Minister Mario Draghi resigned following the collapse of his coalition government.
In Russia, the Russian Central Bank shocked the market with a 150 basis point interest rate cut, raising the key interest rate to 8%, as Moscow continues to reset its economy in the face of international sanctions.
Regarding the movement of individual stock prices during Friday’s session, Uniper shares fell by regarding 30% following the main importer of gas agreed to a rescue deal worth 15 billion euros, equivalent to regarding 15.2 billion dollars, with the German government, which will see the state obtaining a 30% stake in the company.
At the top of the Stoxx 600, Swedish cloud computing company Sinch gained regarding 14%, rebounding from Thursday’s losses following its CEO resigned.
