EUROPE MARKETS: Europe Stocks Score Strongest Weekly Win Since March, Lifted By Global Rally
By Barbara Kollmeyer, MarketWatch , Anneken Tappe
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Buoyed by enthusiasm for global stocks, Europe's main bourse closed higher and registered its best weekly gain since March, adding another positive session on Friday with financials and major oil companies doing the heavy lifting.
What are markets doing?
The Stoxx Europe 600 closed up 0.4% at 384.29, marking its sixth positive session after Thursday's gain of 0.5% and matching the longest win streak since July . For the week, the index gained 1.7% so far, the best percentage gain since the week ended March 9, according to Dow Jones Market Data.
Germany's DAX 30 finished 0.9% higher at 12,430.88, while France's CAC 40 added 0.8% to end at 5,494.17, also representing its best day since March 9. The U.K.'s FTSE 100 ended the week 1.7% higher at 7,490.23, notching its best weekly gain, up 2.7%, since Feb. 16.
The euro last traded lower at $1.1744, compared with $1.1779 late Thursday in New York, while the pound was sharply weaker versus the dollar at $1.3074, down from $1.3268.
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What is driving the market?
Europe stocks started out on a strong note Friday and remained supported throughout the session, soaking up positive sentiment for stocks a day after the Dow Jones Industrial Average and S&P 500 index both extended their record rallies in Friday midday trade. Investors have apparently shaken off trade worries, choosing instead to focus on a positive U.S. growth picture.
U.K. stocks got a lift from the softer pound as that action can boost the FTSE 100, given the index's multinational companies generate most of their sales in other currencies. The pound fell a day after European Union leaders rejected Prime Minister Theresa May's post-Brexit proposal on Thursday, piling on the pressure ahead of the Conservative Party annual conference next week and souring the mood for an end to the stalemate.
In a speech, May said the U.K. must, and will, continue to prepare for a "no-deal" scenario, according to Reuters, leading the pound to sell off further.
Meanwhile, the leader of Italy's 5 Star Movement Luigi di Maio has threatened to leave the government after he and Northern League leader Matteo Salvini clashed with Finance Minister Giovanni Tria over deficit spending. That comes as investors nervously await the government's budget proposal, which could cause a rift between that country and the EU if it doesn't meet deficit requirements.
On the data front in Europe, German and French manufacturing purchasing managers index surveys missed estimates, though that didn't stall stocks.
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What are strategists saying?
"With trade war concerns receding in the background, the U.S. dollar is on track to close out the week trading atop of its seven-month lows against G-10 currency pairs as stronger equity markets and rising bond yields encourage investors to purchase riskier assets," said Dean Popplewell, vice president of market analysis at OANDA.
"Bearing in mind the recent weakness in order data against the backdrop of rising trade tensions, a further deterioration in the PMI survey (most notably in manufacturing) would surely raise concerns that the accelerating trade war between the U.S. and China is also hurting European firms," said analysts at Rabobank in a note, of the Europe data.
Shares of JUST EAT ended the day 4.8% lower, leading decliners on the Stoxx Europe 600 after a report on Bloomberg that ride-hailing company Uber Technologies Inc. was in early talks to buy London-based food-delivery group Deliveroo.
Major oil companies rose as crude prices gained. BP ended 2.1% higher and Royal Dutch Shell gained 2.2% for the Class A shares and 2.5% for the B shares. Royal Dutch Shell is in talks to sell $1.3 billion in Gulf Coast assets, Bloomberg reported .
U.K. luxury-clothing marketplace Farfetch Ltd. priced its initial public offering late Thursday above its price range, raising $884 million to help fund expansion plans. The company sold 44.2 million shares priced at $20 each.