European stocks finished Friday’s session higher, modestly recovering from a selloff spurred by U.S. political drama that dragged major regional benchmarks into the red for the week.
The Stoxx Europe 600 index
) rose 0.6% to close at 391.51. The move followed the lead of U.S. stocks. U.S. stocks continued to gain ground Friday
but those major equity indexes were facing a weekly fall.
The pan-European benchmark fell 1% for the week, the first decline in four weeks, FactSet data showed. 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 pushed by Trump during his election campaign. The prospect of an economic boost from these changes has helped to push stocks world-wide up to records since his 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 pickup in inflation and the rebound in global activity.”
In London, the FTSE 100
rose 0.5% to 7,470.71, and Spain’s IBEX 35
climbed 1.4% to 10,835.40. The IBEX gave up 0.6% on a weekly basis, but the FTSE 100 managed to swing higher.
traded at $1.1188, 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
Hikma Pharmaceuticals PLC
swung higher to end up 2.1%. Shares had dropped during the session 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.
climbed 2.9% 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.