January 23, 2021

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European Markets Close Modestly Higher

3 min read

Despite some disturbing reports on the vaccine front, European markets closed higher on Friday, although buying interest remained somewhat subdued.

Encouraging data on China’s industrial profits contributed a bit to the modest uptick in the European markets.

Investors were also digesting news that questions being raised about the results of AstraZeneca’s late-stage vaccine study, could potentially hinder chances of the vaccine getting speedy U.S. and EU regulatory approval.

Mild optimism about a post-Brexit trade deal aided sentiment. EU negotiator Michel Barnier has reportedly confirmed he will be travelling to London to continue face-to-face talks this weekend.

Meanwhile, worries about coronavirus pandemic and possibilities of tighter lockdown restrictions weighed on stocks.

The pan European Stoxx 600 ended up 0.41%. The U.K.’s FTSE 100 edged up 0.7%, while Germany’s DAX and France’s CAC 40 moved up 0.37% and 0.56%, respectively. Switzerland’s SMI edged up 0.03%. While the FTSE 100 gained 0.3% in the week, the CAC 40 and the DAX advanced by about 2% and 1.5% this week.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Netherlands, Norway, Portugal, Spain and Sweden closed notably higher. Poland, Ireland and Russia edged up marginally, while Iceland and Turkey closed weak.

In the German market, Wirecard, Infineon Technologies and Covestro rose sharply. RWE, Merck, BASF, Siemens, Fresenius and Daimler also closed on a firm note.

On the other hand, Volkswagen, BMW, Adidas, Thyssenkrupp and Munich ended notably lower.

In France, Valeo, Pernod Ricard, WorldLine, STMicroElectronics, Atos and Capgemini gained 2 to 3%. Saint Gobain, Orange, Renault and LOreal also closed notably higher.

In the UK market, Rightmove, GVC Holdings, Smith & Nephew, Fresnillo, Scottish Mortgage, Smith DS, B&M, HSBC Holdings, Antofagasta, Aveva Group, Just Eat Takeaway, Phoenix Group, Halma and Ocado gained 1 to 3%.

On the other hand, Severn Trent, DCC, IAG, Land Securities, United Utilities, Smiths Group, Homeserve, BAE Systems and Bunzl lost 1 to 2.5%.

In economic releases, the French economy rebounded at a faster than initially estimated pace in the third quarter, revised data from the statistical office Insee showed.

Gross domestic product grew 18.7% on a quarterly basis, which was revised up from 18.2% estimated previously. The expansion was in contrast to a 13.8% fall logged in the second quarter. Still GDP was well below the level it had before the health crisis.

Germany’s import prices declined 3.9% in October, following a 4.3% decrease in September, data from Destatis showed. Economists had expected a 4.1% fall. On a monthly basis, import prices rose 0.3% in October.

Eurozone economic confidence weakened to a four-month low in November as new restrictions to curb the spread of Covid-19 weighed on sentiment among retailers, service providers and consumers, according to survey results from European Commission.

The economic confidence index fell less-than-expected to 87.6 from 91.1 in the previous month. The expected reading was 86.5. This was the first fall in seven months.

Consumer sentiment weakened for the second straight month in November. The corresponding index came in at -17.6 versus -15.5 in October and matched flash estimate.

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2020-11-27 13:28:09

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