Europe close: Stocks manage positive finish to turbulent week
European shares ended the final day of the week higher, boosted by auto stocks and the eurozone central bank’s promise to continue stimulus.
The pan-European Stoxx 600 index was last up 1.06%, with all major regional bourses in the green.
“We’ve seen some big moves this week, with global equity markets getting routed on Monday as rising virus concerns rippled out across global markets sending the DAX to a two-month low, and the FTSE 100 closing at its lowest level in three months,” said CMC Markets chief market analyst Michael Hewson.
“The declines were as a result of worries that surging Delta cases and rising self-isolation rates would cripple the ongoing recovery.”
Hewson said those concerns had not gone away, but noted that markets seemed to be taking a “glass half full” attitude as company reports came in mainly ahead of expectations.
“As a consequence, markets in Europe look set to close the week higher, and while the rebound since Monday won’t reverse the losses of last week, the fact that we’ve finished this week higher after such a poor start on Monday is remarkable in itself.”
Investors were earlier digesting official UK data that showed a rise in retail sales between May and June, helped along by the European football tournament.
Sales were up 0.5%, coming in a touch above consensus expectations for 0.4% growth.
Compared with their pre-pandemic February 2020 levels, sales were 9.5% higher.
In other economic news, eurozone business activity expanded at its fastest monthly pace in over two decades in July, IHS Markit’s flash survey showed, but fears of another wave of infections hit business confidence.
Germany’s purchasing managers’ index (PMI) hit its highest level in nearly a quarter of a century, creating inflationary bottlenecks.
In equity markets, Ultra Electronics rocketed 32.29% after the defence company said it was minded to recommend a £2.58bn takeover bid from Cobham to shareholders.
Cobham, owned by US private-equity firm Advent International, has offered £35 a share, a 42% premium to Ultra’s share price of £24.70 on Thursday.
Telecoms operator Vodafone Group rallied 2.41% after it reported a rise in first-quarter revenue as European and African services returned to growth.
Shares in French car parts maker Valeo jumped more than 6% after it posted higher first-half sales and profit, and said it expected the shortage of key technology chips to ease.
Peers Faurecia, Continental and Daimler were all higher on the news.
Rafale jets maker Dassault Aviation climbed over 4% on reporting higher sales and profits in the first half of the year.
On the downside, Norwegian renewables energy firm Scatec was sliding by over 13%, despite a rise in second quarter earnings.
Danske Bank was down more than 4% as its second-quarter return on equity declined to 6.5%, down from 7.5% in the first quarter and well below the level of its Nordic peers.