European stocks rose on Friday, boosted by positive earnings updates from Barclays PLC and a surge from Airbus SE, but lingering concerns about the economic impact of the surge in COVID-19 cases saw the markets post their biggest weekly decline in a month.
Breaking a four-day losing streak, the pan-European STOXX 600 rose 0.62% to 362.5. However, it was down 1.36% from the previous week.
London’s FTSE 100 outperformed its European peers, up 1.29% to 5,860.28 after Barclays jumped 7% on strong results. The index posted a drop of 1 percent for the week.
Barclays’ results have boosted regional banks, putting them on track for their best monthly performance in over a year. Other sectors considered more economically sensitive such as automakers and oil and gas have also found favor.
“Barclays’ better-than-expected results have sparked renewed interest in bank stocks, most of which are trading at depressed levels, so value investors will be particularly interested,” said the chief investment officer of AJ Bell, Russ Mold.
Meanwhile, data on Friday showed that economic activity in the eurozone plummeted this month, while Germany’s manufacturing sector grew at a faster pace this month.
However, German service activity has declined, suggesting that Europe’s largest economy operates at two speeds.
“Opposing forces are at play right now,” said Emmanuel Cau, head of European equity strategy at Barclays. “Globally, these two main sources of growth – the United States and China – are still recovering. impacted by the second wave. “
The surge in COVID-19 cases in the region has led to more brakes lately, and France has extended the curfew to more than two-thirds of its population.
French Economy, Finance and Recovery Minister Bruno Le Maire said GDP would likely contract in the fourth quarter, adding that the curfew measures would cost around € 2 billion (2.37 billions of dollars).
With some optimism this week stemming from the new fiscal stimulus in the UK, markets are now looking to the European Central Bank meeting next week when analysts expect the bank to signal political support in December. .
Globally, the mood is cautious with less than two weeks of the US presidential election.
Planemaker Airbus jumped 5.6% after telling suppliers to be ready for a production ramp-up once demand recovers from the COVID-19 crisis.
Swiss engineering firm ABB Ltd was among the biggest drag on the STOXX 600 after saying it expects its orders and revenues to remain under pressure for the rest of the year.
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