By Amruta Khandekar
-Europe’s STOXX 600 edged higher on Friday, with gains in healthcare firms and banks putting the index on course to end the last week before Christmas on an upbeat note.
The region-wide STOXX 600 rose 0.2% at 0915 GMT and was bound for a 0.8% weekly advance.
With the early gains, the index looks set to recoup a small part of last week’s staggering 3.3% loss, which was driven by heightened concerns of a recession after the U.S. Federal Reserve and the European Central Bank signalled a prolonged rate-hike cycle.
U.S. data on Thursday, showing a tight labour market and economic resilience, exacerbated those worries and dented expectations of a so-called “Santa rally” before the year-end.
Still, upbeat earnings from Nike and FedEx Corp earlier this week and improving consumer confidence in the U.S. and euro zone have offered some hope that the economic downturn caused by sharp interest rate hikes may not be as bad as feared.
Morale amongst Italian businesses and consumers rose in December, data showed on Friday, although the manufacturing sector was more downbeat.
“Investors have been weighing up some better-than-expected corporate earnings this week against macroeconomic concerns about rising interest rates and a global slowdown,” said Victoria Scholar, head of investment at Interactive Investor.
Thin trading volumes around the holidays could also be exacerbating market moves, Scholar added.
Trading on the London Stock Exchange will be limited to half a day, with the market closing process starting from 1230 GMT. Other European bourses will remain open all day, except for Dublin, which also has a half day.
European markets will be closed on Monday, Dec. 26, for the Christmas holiday.
On the economic data front, a report showed Spain’s economy expanded 0.1% in the third quarter, slowing from a 2.0% growth rate in the previous three-month period.
Spain’s IBEX index was up 0.3%.
Among STOXX 600 sectors, shares of retailers rose 0.6% to lead gains.
But the biggest boost to the STOXX 600 came from healthcare firms, which rose 0.3%, helped by a 5.7% jump in Bavarian Nordic after the vaccine maker signed a contract with the U.S. Department of Defense.
Rate-sensitive banks gained 0.3% after posting declines in the previous session, while the tech sector reversed early losses.
Shares of French bank Credit Agricole and Italy’s Banco BPM (BBPM), which struck a long-term bancassurance partnership on Friday, rose 0.2% and 0.4%, respectively.
