European equity markets gained on Friday, with both the German DAX and the Stoxx 600 index rising by 0.4%. Leading the Friday gains were tech, retailers, and bank stocks, all of which rose by more than 1%. Conversely, utility companies declined. Looking at individual stock movements, shares of Philips plunged by almost 8% after the US FDA expressed doubts about the adequacy of the testing data for their recalled devices. On a positive note, Aviva surged nearly 5%, leading a broader rally in insurance stocks. However, both indexes recorded their third consecutive weekly losses due to concerns that central banks might maintain higher interest rates for a longer duration than initially anticipated. This concern was further reinforced by the release of the stronger-than-expected US jobs report on Friday.
The FTSE 100 index closed a choppy session 0.6% higher at 7,495 on Friday, overcoming a momentary dip after the hot payroll reading in the United States resumed this week’s bond rout and pressured equities worldwide. Oil giant Shell advanced 1.9% after reporting that gas trading boosted its earnings in the third quarter. Also, Aviva soared by 5.3% amid speculation that the company is a potential target for a takeover. Still, the government bond rout over the week pressured equities enough for the FTSE 100 to book a 1.5% since last Friday.
The CAC 40 index rose about 0.9% to close at 7,060 on Friday, in line with its European counterparts and Wall Street. Non-farm payrolls surged by an impressive 336 thousand in September, well above the expected gain of 170 thousand, while wage growth slowed moderately. Among individual stocks, Dassault Systemes (+3.1%) was the top gainer, followed by STMicroelectronics (+2.6%), Teleperformance (+2.4%), Bouygues (+2.4%), Axa (+2.4%) and Credit Agricole (+2.3%). By contrast, Danone (-1.2%), Pernod Ricard (-0.8%) and Alstom (-0.8%) were the biggest laggards. On the week, the CAC 40 lost about 1%.
The FTSE MIB jumped by 1.16% to close at 27,811, rebounding from session lows with support from the banking sector.The BTP-Bund 10-year spread rose above the 200 bps threshold, widened by the government’s decision to raise its budget deficit target as investors grow sceptical on whether Rome can rein in unsustainable debt. On the corporate front, Banco BPM (+3.5%), Bper Banca (+3%) and Unicredit (+2.9%) were among the best performers. Also, Intesa Sanpaolo was up by 1.6% after the lending giant decided to invest in SpaceX. Conversely, Telecom Italia plunged almost 6% following the meeting between the Minister of Economy and Vivendi regarding the potential sale of NetCo. On the week, the FTSE MIB lost nearly 1.6%.
The IBEX 35 rose to 9,235 on Friday, following its European peers and attempting a rebound from the earlier falls. Laboratorios Farma was the main protagonist, up by 3.59% due to the announcement about López-Belmonte family, founder of the pharmaceutical company, exceeding the threshold of 3% of Almirall shares. Additionally, Group ACS (2.78%), CaixaBank (+2.28%), Sabadell (+2.19%) and Inditex (2%) gained. Sabadell increased on the raise of its potential by Morgan Stanley, while the textile giant benefited from its first month in the history without selling recommendations. On the other hand, losses came from the energy companies Repsol (-1.25%) and Acciona Energía (-0.86%). Weekly, the index declined by 2.05%.
