LONDON — European markets closed higher to start the second quarter on Friday as talks between Russia and Ukraine continued to guide investor sentiment.
The pan-European Stoxx 600 closed tentatively 0.6% lower, with miners climbing 2.2% to lead the gains as nearly all sectors and major exchanges finished in positive territory.
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In terms of individual stock price performance, the British advertising company Capital S4 climbed more than 11% to more than recover from Thursday’s losses, which came after the company withdrew its quarterly results due to an audit delay. The upward move came when Permian Investment Partners disclosed a 3.46% stake in the company as of March 31.
At the bottom of the index, French hotel company Sodexo fell more than 9% after lowering its growth forecast.
European stocks are coming off their first losing quarter in two years after closing Thursday’s session down 6.3% year-to-date.
Roland Kaloyan, Head of European Equity Strategy at Societe Generaletold CNBC on Friday that risk appetite for European equities in February and March was the worst the bank has seen since it began collecting data in 2000.
However, Kaloyan said the French lender did not share the “very bleak” outlook currently permeating European markets, noting that certain pockets of the market are “very attractive”.
Although volatility is expected to continue until there is more clarity on the geopolitical front, Societe Generale believes investors will return as soon as the clouds lift.
“If we have better visibility on the situation, these investors will come back, and … the valuation is very attractive. We are now trading at more than 30% discount on European equities compared to the United States. discount conditions” , Kaloyan told CNBC’s “Squawk Box Europe.”
“What’s amazing is that if you look at every sector in Europe except pharmaceuticals, you’re trading at a steep discount on European equity sectors relative to their US peers, so… in At the moment, the market has already priced in a lot of bad news, and probably more than most consensus expects. [among] economists.”
Talks between Russia and Ukraine have so far yielded little fruit, with Kyiv and its Western allies remaining skeptical of Moscow’s intentions and the legitimacy of its commitment to partial military withdrawals in northern Ukraine. .
On Wall Street, stocks were little changed on Friday as the Labor Department’s official jobs report for March showed payrolls rose by 431,000 despite worries about an economic slowdown.
U.S. investors appear for now to have shrugged off a troublesome bond market recession indicator that was triggered after Thursday’s closing bell on Wall Street. The 2 years and 10-year cash flow yields reversed for the first time since 2019, and did so again on Friday after the jobs report came in slightly below expectations.
On the data front in Europe, eurozone inflation accelerated in March to a new record high, new readings came out on Friday, at 7.5% a year against a Dow Jones consensus forecast of 6.9%.
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