EUROPE EQUITY BULLISHNESS INTACT AS MARKET EDGE HIGHER
European stocks markets closed mostly higher at fresh record highs on Friday, with the Stoxx 600 ending flat, while the DAX notched up 0.1%, as investors digested a larger-than-expected increase in US employment, a new batch of corporate earnings reports and the latest policy decisions by major central banks. German utility Uniper raised its 2021 earnings forecast due to a strong nine-month performance, while British Airways parent company IAG said it was heading for an annual loss of about €3 billion, citing pandemic restrictions which lasted most of 2021. On the monetary policy front, the US Federal Reserve signaled Wednesday it was in no hurry to raise interest rates, while the Bank of England surprised investors by keeping policy steady. ECB President Lagarde has also assured the markets that the bloc's central bank was not predicting a rate hike in 2022. On a weekly basis, European markets secured their fifth straight week of gains, the longest winning streak since April.
The FTSE 100 added 24 points, or 0.3% to 7,304 on Friday, the highest since February 2020 driven by gains in energy stocks as oil prices rose for the second day. Also, the banking sector rebounded 1.1% from its worst session in over a month the day before. Among single stocks, British Airways parent company IAG rose surged 6.1% on recovery hopes despite saying it was heading for an annual operating loss before exceptional items of about €3 billion due to pandemic restrictions which lasted most of 2021. The FTSE 100 gained about 1% this week, after the Bank of England left monetary policy unchanged on Thursday, dashing investors' expectations for a hike, but signaled further raises could come in the coming months.
The CAC 40 Index rose 0.7% on Friday to close at a record of 7,040.79, while hitting an intra-day fresh high of 7,063.40, as the luxury goods sector continues to push the index upwards. Gains were driven by fresh records from Hermes (1.3%) and L’Oreal (1%), both among the 10 highest capitalizations of the index. Further upward pressure in the sector was aided by Kering (1.7%) and Interpafums (2.7%). Discretionary goods have increased 12.8% in the last 30 days and over 35% year-to-date. At the same time, JCDeaux surged 5% on the back of increasing its 4th quarter guidance. Meanwhile, Axa retreated 0.2% after having been in the green most of the session, as investors digest the announcement of its EUR 1.7 billion share buyback program.
The FTSE MIB edged 1% higher on Friday to close at 27,795.93, the highest close since September of 2008, as investors digested a series of third quarter corporate results and better-than-expected US employment data. Telecom Italia (5%) led the gains among blue chips amid resurfacing rumors that the firm is willing to merge its fixed-line network with those of state-backed Open Fiber, in addition to private equity firm KKR expressing interest in investing on the fixed-line network. At the same time, Ferrari (2.3%) closed at a fresh record, while Banco Bpm (5%) and Banca Generali (3.2%) booked gains from strong corporate results. On the other hand, Diasorin fell 5.46% after publishing its EUR 2.9 million treasury share buyback from the prior two days.
