By Shubham Batra
(Reuters) -European shares climbed on Friday, on track to end a data-packed week on a positive note, as stellar earnings updates and hopes of imminent rate cuts by the European Central Bank lifted investors’ appetite for risky assets.
The pan-European STOXX 600 index rose 0.5% to hit a two-year high, led by miners, which jumped 1.7% so far this week.
The STOXX index of 50 largest companies hovered around its highest level in 23 years, while a gauge of euro zone blue-chip shares hit an all-time high.
German and French stocks extended gains on Friday to hit another record high.
UK’s FTSE 100 outperformed regional peers for the day with a 0.7% rise after British retail sales rose by a stronger-than-expected 3.4% in January, from the prior month when they fell by 3.3%.
“Today’s numbers show that the rise in retail sales was still driven by increased prices, with consumers actually buying less stuff now than they were before the pandemic,” said Michael Field, European Market Strategist at Morningstar.
Boosting sentiment, ECB member and Bank of France head Francois Villeroy de Galhau said there are several compelling reasons why the ECB should not hold off for too long on an initial interest rate cut this year.
Meanwhile, ECB policymaker Isabel Schnabel said Europe’s sluggish productivity growth may slow the fall in inflation to the European Central Bank’s 2% target.
Shares of Metso Corp jumped 8.3% after the Finnish mining equipment maker reported a fourth-quarter profit beat and gave an optimistic outlook for its aggregates unit.
NatWest advanced 1.9% as the British bank posted a forecast-beating profit for 2023.
The lender gears up for a crunch sale of state-owned stock in the company after a scandal-hit year.
Sika rose 3.2% after the Swiss construction chemical maker reported annual earnings in line with analyst estimates on Friday and said it expects sales to increase 6%–9% in 2024.
Belgium’s Umicore dropped 3.9% to the bottom of STOXX 600 after the company forecast a decline in its 2024 core profit.
Eni slid 1.6% after the Italian energy group reported a fourth-quarter adjusted net profit of 1.64 billion euros ($1.8 billion), beating analysts’ expectations.
Swiss Re fell 1.2%.
The reinsurance company’s net profit for 2023 surged 580%, in line with expectations, as it recovered from a difficult period a year earlier.
Aixtron shares were up 6.4% after semiconductor equipment supplier Applied Materials forecast better-than-expected second-quarter revenue on strong demand for advanced chips used in artificial intelligence.
(Reporting by Shubham Batra in Bengaluru; Editing by Sherry Jacob-Phillips and Sohini Goswami)
