business

European Stocks Close Higher as Global Markets Suffer Turbulent Week; Richemont Falls 13%

Reuters
  • European stocks still logged a negative week, down 1.3%, having closed sharply lower on Thursday as concerns about inflation and ominous earnings reports from U.S. retailers dented global sentiment.
  • On the data front, German producer prices soared 33.5% year on year in April, a new record annual rise as the war in Ukraine drives energy costs skyward in Europe's largest economy.
  • U.K. retail sales jumped unexpectedly in April by 1.4% month-on-month, the Office for National Statistics said Friday. However, economists are expecting this to be a blip in an otherwise downward trajectory.

LONDON — European markets closed higher on Friday, tracking global gains as another volatile trading week comes to a close.

The pan-European Stoxx 600 added 0.5% by the close, with travel and leisure stocks climbing 2% to lead gains as almost all sectors and major bourses finished in positive territory.

European stocks still logged a negative week, down 1.3%, having closed sharply lower on Thursday as concerns about inflation and ominous earnings reports from U.S. retailers dented global sentiment.

Markets in Asia-Pacific advanced on Friday, with Hong Kong's Hang Seng index leading gains, as China kept its one-year benchmark lending rate unchanged at 3.7% but cut its five-year loan prime rate by 15 basis points.

U.S. stocks fell on Friday, extending losses from earlier in the week and putting the S&P 500 on the cusp of a bear market.

Global investors continue to track the war in Ukraine and its geopolitical implications, which have fed into soaring energy and food prices worldwide. The World Food Programme has said failure to reopen Ukrainian ports would be a declaration of war on global food security.

The war is likely to continue throughout the summer and possibly beyond, despite signs that parts of the country are returning to some normalcy, Ukraine's presidential advisor Oleksii Arestovych said, according to NBC News.

IMF Chief Economist Pierre-Olivier Gourinchas told CNBC on Friday that leaders anticipate disruption related to supply chains will ease over the coming months, alleviating some of the global price pressures. However, he cautioned that there are still a number of risks to the outlook.

"We see the lockdowns in China that are being extended that could lead to further disruptions, we see the increases in energy prices and maybe food prices that is going to trickle down in terms of headline inflation," Gourinchas said.

"So we are expecting inflation to moderate in the second half of the year and then 2023, but we could have bad surprises."

On the data front, German producer prices soared 33.5% year on year in April, a new record annual rise as the war in Ukraine drives energy costs skyward in Europe's largest economy.

U.K. retail sales jumped unexpectedly in April by 1.4% month-on-month, the Office for National Statistics said Friday. However, economists are expecting this to be a blip in an otherwise downward trajectory.

"Still, the outlook is undoubtedly challenging. Today's consumer confidence figures fell below all-time lows, and that's especially noticeable when looking at consumers' outlook for personal finances," said James Smith, developed markets economist at ING.

"Assuming consumers remain more enthusiastic about services spending rather than goods in the near-term, we suspect this cost of living squeeze will be more acutely felt on the high street and among online retailers over the coming months."

In terms of individual share price movement, Denmark's Rockwool International climbed 8% to lead the Stoxx 600 after its first quarter earnings report.

At the bottom of the index, Swiss luxury goods company Richemont plunged 13% after its full-year results.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Copyright CNBCs - CNBC
Contact Us