European stocks rise for second weekly gain

European shares rose on Friday to register a second weekly gain on the trot, supported by healthcare and banking stocks, as investors cheered better-than-expected economic data from the UK and Germany, suggesting that recessions in both countries might not be as steep as had been feared.

The pan-European Stoxx 600 index rose 0.5 per cent. The UK economy grew unexpectedly in November, expanding by 0.1 per cent on the month. Meanwhile, German gross domestic product was reported to have grown by 1.9 per cent last year, marginally more than economists had predicted.

DUBLIN

The Iseq overall index advanced 0.5 per cent to 7,815.66 to levels last seen in late February.

AIB gained 1.7 per cent to €3.71, as the lender secured clearance from the Competition and Consumer Protection Commission (CCPC) to proceed with the purchase of Ulster Bank’s tracker mortgages book. Bank of Ireland declined by 0.4 per cent to €9.11, however.

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CRH was also in demand, moving 0.7 per cent higher to €41.65.

Cairn Homes dipped by 0.6 per cent to 98 cent, succumbing to a bit of profit taking following the strong run over the previous four days after the housebuilder issued a strong trading update. Still, it remained up 6 per cent on the week.

Rival Glenveagh advanced 2 per cent to 92 cent.

LONDON

The FTSE 100 climbed 0.5 per cent to its highest since May 2018 on Friday, as risk appetite among investors rose after surprise growth in the domestic economy in November and a boost from a slowdown in US inflation.

Financial stocks led advancing stocks, with HSBC and exchange operator London Stock Exchange Group gaining 1.7 per cent and 1.4 per cent, respectively.

The UK economy unexpectedly eked out a modest growth in November, lifted by higher spending in pubs and bars from World Cup cheerers and video game sales that reduced the chances of slipping into recession.

However, Dublin-based, but London-listed cider and beer maker C&C Group slumped 10.1 per cent after it issued a dour full-year profit outlook.

888 Holdings fell 4.7 per cent after the bookmaker said its chief executive, Yariv Dafna, would step down from the role, while the group reported a 3 per cent fall in quarterly revenue.

EUROPE

Rate-sensitive tech and retail stocks have led gains so far this year, up 14 per cent and 15 per cent, respectively, after a rough 2022 when fears of an economic slowdown and rising interest rates hammered these sectors.

On Friday, healthcare stocks provided the biggest boost to the index, with Novo Nordisk and Roche Holding gaining between 1 per cent and 2.5 per cent.

Enel edged up 0.4 per cent after its chief executive was quoted as saying the Italian power utility company could secure up to €5 billion for investment from REPower EU energy funds in addition to €3.5 billion EU recovery funds already won.

Shares of online gaming company Kindred Group tumbled 15.9 per cent on profit warning for the fourth quarter.

NEW YORK

Shares on Wall Street were largely lower on Friday as investors mulled earnings reports from several large banks such as JP Morgan, Wells Fargo, Bank of America and Citigroup. The stocks of each of the banks declined.

JP Morgan chief executive Jamie Dimon and Bank of America chief executive Brian Moynihan also expressed caution about the slowing economic environment.

“Some of the comments about fears of a recession and [the banks] trying to continue to fortify their balance sheet against loan losses have more people nervous,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“Earnings as a whole were pretty good, banks remain extremely well capitalised.”

Tesla fell after slashing prices on its electric vehicles in the US and Europe by as much as 20 per cent after missing 2022 deliveries estimates.

However, UnitedHealth Group rose 1.9 per cent after beating Wall Street expectations for fourth-quarter profit.

Delta Air Lines fell as the company forecast first-quarter profit below expectations. – Additional reporting, Reuters