© Reuters. The DAX chart of the German stock price index was taken on August 5, 2021 on the Frankfurt Stock Exchange in Germany. REUTERS/Staff
Authors: Sruthi Shankar and Ambar Warrick
(Reuters)-European stock markets closed slightly higher on Friday, marking their best week since mid-March. This was due to strong quarterly results and hopes for a broader rebound drove buying in economic-related sectors.
The pan-regional index set a record high for the fifth consecutive week, rising 1.8% this week to close at 469.97 points.
Bank stocks performed the best this week, rising 4.4%, as the positive earnings reports of major companies such as HSBC and Societe Generale (OTC:) boosted the index.
The sector also rose nearly 2% on Friday, outpacing its regional peers, as the yields on German bonds and US Treasury bonds soared due to strong US employment data. [GVD/EUR] [US/]
Energy stocks are one of the best performing stocks this week, rising 3.6% because strong earnings and expectations of a rebound in economic activity this year have driven buying.
“Recent positive business survey data highlights our view that the global reopening and recovery trend is still on track. Therefore, we expect cyclical parts of the market to outperform the broader market, including energy and finance,” UBS analysts Wrote in a report.
The much better than expected quarterly results and a series of consolidation activities have provided impetus to European stock markets through lingering concerns about the surge in global COVID-19 cases.
According to data from Refinitiv IBES, so far, two-thirds of STOXX 600 index companies have issued reports, and 67% of them have exceeded expectations. This is much higher than the 51% beat rate in a typical quarter.
However, data on Friday showed that German industrial output unexpectedly fell again in June, indicating that the supply chain disruption caused by the pandemic may continue temporarily.
Among the individual promoters, Allianz (DE:), the largest insurance company on the African continent, rose 2.5% after the company reported better-than-expected second-quarter net profit growth and provided a more optimistic full-year outlook.
French IT consulting group Atos rose 10.9% to the top of the STOXX 600 index after reports that several private equity firms are paying attention to the company.
London Stock Exchange The Group (LON:) rose 5% after reporting revenue growth of 4.6% in the first half of 2021.
Due to one-off tax incentives and increased revenue, Italian bank Banco BPM turned losses into profits in the second quarter, and its stock price rose 7.3%.
Among the notable decliners, the German meal package delivery company HelloFresh fell 2.5% after the company lowered its 2021 profit forecast due to increased spending to achieve strong growth.
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