European stocks gained ground Friday, modestly recovering from a U.S. politics-spurred selloff the prior day that should drag major regional benchmarks lower for the week.
The Stoxx Europe 600 index
) rose 0.4% to 390.60, with only the telecom sector in the red. The move follows the lead of U.S. stocks, which rose after pulling back at the open Thursday. The London benchmark on Thursday fell 0.5%.
The pan-European benchmark is facing a loss of 1.3% for the week, which would be its first decline in four weeks, FactSet data show. The drop came as part of a rout in global equities that followed a report that U.S. President Donald Trump tried to stop a Federal Bureau of Investigation probe into links between his associates and Russian officials.
The report fueled questions about the Trump administration’s ability to secure tax cuts, higher fiscal spending and looser regulatory rules. The prospect of an economic boost from these changes has helped push stocks worldwide up to records since Trump’s election in November.
“U.S. policy uncertainty is arguably greater than at any time since last November’s elections, but that should not entirely cloud what remains a generally supportive growth backdrop for equity markets, especially in the eurozone,” said Ian Williams, an economist and strategist at Peel Hunt, in a note.
Earnings for European companies rose by an average of 23% during the first quarter, said J.P. Morgan on Thursday. European sales growth of 10% was the strongest globally.
“[First-quarter] earnings delivery was the best in six to seven years, with above-average positive surprises and double-digit growth seen in all the main regions,” said J.P. Morgan equity strategist Emmanuel Cau in a research note. “Top line was particularly strong, helped by higher commodity prices, the pick-up in inflation and the rebound in global activity.”
traded at $1.1138, up from $1.1103 late Thursday. The shared currency this week rose above $1.11 for the first time since November as investors retreated from the U.S. dollar
Stock movers: Hikma Pharmaceuticals PLC
fell 4.7% after the company lowered its 2017 revenue guidance, citing lower prices at its generics business and a delay in launching a generic version of GlaxoSmithKline’s
Advair Diskus asthma drug.
rose 2.8% after Exane and Goldman Sachs each raised price targets on the payment processing services company.
Data: German producer prices rose 3.4%, their strongest annual gain in over five years in April, helped by higher metals prices.