Frankfurt’s Dax added 0.2% to extend its record high to 18,212 on Friday, enjoying further support from dovish signals by major central banks and a rally for global tech shares this week. The Federal Reserve opted to maintain interest rates on Wednesday, yet reaffirmed its intention to implement a total of 75 basis points in rate cuts by year-end. Meanwhile, on Thursday, the Bank of England signaled the British economy's trajectory towards potential rate reductions, while the Swiss National Bank caught markets off guard with its decision to cut rates. On the data front, the domestic Ifo Business Climate indicator surpassed estimates to 87.8 in March, further supporting hopes that the German economy is gaining traction. DHL lifted the index with a 2% gain, while Sartorius and Siemens Energy extended their strong momentum with 2.4% and 4% gains, respectively.
The FTSE 100 was up by 0.6% to close at 7931 on Friday, marking its highest level in more than a year. This increase followed a 1.9% rise the previous day, driven by tamer hawks at the BoE meeting and Governor Bailey's hints of three interest rate cuts within the year, with the first coming in summer. Retail sales remained stagnant last month, contrary to the anticipated 0.3% decline, while consumer confidence, as indicated by the Gfk index, fell below expectations. The pound weakened further. Leading sectors included consumer non-cyclicals, financials, and real estate. In corporate developments, Phoenix Group soared more than 8% after the company reported better-than-expected earnings, along with a positive outlook and a healthy dividend. Conversely, JD Sports experienced a 6.3% decline, influenced by negative sentiment following Nike's warning that both its short-term and long-term prospects would be bleaker than analysts had anticipated. On the week, the FTSE 100 soared over 2.5%.
The CAC 40 closed at 8,151 on Friday, slipping by 0.34% as investors exercised caution after recent record highs influenced by the Fed's accommodating stance. Meanwhile, heavyweight luxury equities continued to weigh on the index, with Kering at the bottom with losses of 3.31% and a near 16% decline on the week, due to a profit warning earlier this week linked to lower Asian sales, notably a 20% drop for Gucci. The news dragged LVMH shares down by 2.15%, and Hermes saw a decline of 0.93%. For the week, the CAC 40 posted a marginal decline of 0.16%.
The FTSE MIB was little changed to close at 34,343 on Friday, in line with its European peers, as investors took a breather after the recent rally that drove the index to fresh multi-year highs. On the corporate front, Nexi, Italgas, and Recordati Ord emerged as top performers, rising around 2% each. Banco BPM (+0.7%) also did well after Fitch upgraded its debt ratings by one notch. Conversely, Stmicroeletronics was among the biggest laggards, declining 1.4%, as the supervisory board unveiled this year's dividend policy. Brunello Cucinelli and Banca Monte Paschi Siena also underperformed, with both dropping nearly 3% during the session. In addition, Enel remained relatively unchanged, grappling with mixed signals from its 2023 financial results, which showcased a revenue contraction but an uptick in profitability. On the week, the FTSE MIB rose 1.2%.
The IBEX 35 rose to 10,943 on Friday, extending its rally for the fourth session and closing the week of central bank meetings with a 3.3% gain. The increases were headed by energy companies, namely Acciona (2.7%), Solaria Energia (2.7%) and Endesa (2.7%) and Acciona Energia (2.3%). Also, blue-chip Santander advanced by 2.1%, having announced the expected distribution of 6,000 million in dividends in 2024. On the negative side, Grifols plummeted by 6%. Yesterday, the Market Commission finalized its evaluation of Grifols' accounts without identifying "significant errors" but it did find relevant deficiencies in detail and accuracy of the breakdowns and explanatory notes that supported the figures. The other decliners included Fluidra (-1.4%), IAG (-1.4%), and Ferrovial (-1.1%).
