(Alliance News) - European equities rounded off the week in bullish fashion, as traders dialled back central bank rate hike expectations, while corporate earnings in London and across the pond were met warmly.
The FTSE 100 closed up 78.18 points, or 1.1%, at 7,423.43, climbing 2.0% since last Friday and 3.5% over the whole of July.
The weekly gain came despite a wealth of risk events, including the latest Federal Reserve interest rate decision on Wednesday, a US gross domestic product reading on Thursday before GDP and inflation data from the eurozone on Friday.
The FTSE 250 index jumped 309.71 points, or 1.6%, at 20,164.90. The mid-cap index added 1.7% this week.
The AIM All-Share index closed up 8.68 points, or 1.0%, at 921.80 - adding 1.9% for the week.
The Cboe UK 100 index ended up 1.2% at 741.86. The Cboe 250 surged 1.9% at 17,582.62. The Cboe Small Companies added 1.0% at 13,885.77.
The pound was quoted at USD1.2163 late on Friday, up from USD1.2129 at the London equities close Thursday.
In Paris, the CAC 40 stock index jumped 1.7%. In Frankfurt, the DAX 40 surged 1.5%.
"It's been another positive week for markets in Europe, with investors taking comfort from earnings numbers that have by and large been better than expected, despite concerns about the growth outlook. The gains seen this month have offered a welcome respite, while the belief that central banks may have to pare back the number of rate hikes they can deliver is also helping, pushing yields sharply lower, and improving the attractiveness of stocks in general," CMC Markets analyst Michael Hewson commented.
After figures on Thursday showed the US entered a technical recession, the data continued to come thick and fast on Friday.
Economic growth in the eurozone slowed in the second quarter, according to a preliminary flash estimate published by Eurostat.
On an annual basis, gross domestic product expanded by 4.0% in the second quarter, slowing from growth of 5.4% in the first quarter. The latest reading was higher than the 3.4% consensus estimate. Meanwhile, quarter-on-quarter growth improved to 0.7% from 0.5%.
Analysts at Capital Economics commented: "The chunky increase in euro-zone GDP in Q2 was due to the re-opening of the services sector which has masked a deterioration in most other parts of the economy. We expect a triple whammy of high inflation, tighter monetary conditions and an energy crisis to push the economy into recession later this year."
Figures on Friday showed the eurozone consumer price index rose by 8.9% in July, picking up pace from a 8.6% increase in June. The print was higher than the market forecast, cited by FXStreet, of 8.6%. The inflation rate remains well above the European Central Bank's target of 2% inflation over the medium term.
The euro traded at USD1.0196 at the European equities close on Friday, up from USD1.0133 late Thursday.
The dollar's post-Fed decline against the yen continued. The greenback faded to JPY133.45 late Friday in London from JPY134.45 on Thursday.
A key inflationary gauge in the US hit its highest level in 40 years, the Bureau of Economic Analysis said Friday.
The US personal consumption expenditure price index increased by 6.8% year-on-year in June, accelerating from a 6.3% rise in May. The print was the highest since January 1982 and beat the market forecast, cited by FXStreet, of 6.7%.
On an annual basis, the US core PCE index, the preferred gauge of inflation by the Fed, accelerated to 4.8% in June from 4.7% in May.
US stocks were higher on Friday, ending the week positively as earnings from Amazon and Apple impressed. The Dow Jones Industrial Average was 0.2% higher, with the iPhone maker among the best performers. The S&P 500 was 0.5% higher and the Nasdaq Composite climbed 0.6%.
Apple posted record revenue of USD82.96 billion for the third-quarter ended June 25, up 1.9% from USD81.43 billion a year prior.
E-commerce titan Amazon, meanwhile, said net sales in the second quarter of 2022 climbed 7.2% to USD121.23 billion from USD113.08 billion a year earlier.
Apple shares were 2.2% higher, while Amazon jumped 10%.
"Despite failing to maintain the kind of momentum traders have grown accustomed to, outperformance on both profits and revenues for these two tech giants highlight that market pessimism has been largely overblown this earnings season," IG analyst Joshua Mahony commented.
In London, NatWest was a standout performer, rising 8.2%.
The lender reported a strong performance in the first half of 2022, against a beneficial backdrop of rising UK interest rates.
For the six months to June 30, total income was GBP6.22 billion, up 21% from GBP5.14 billion last year. Operating pretax profit was 13% higher at GBP2.62 billion, from GBP2.32 billion.
Also impressing, chemicals firm Croda added 5.1% as it reported profit trebled in the first half of 2022.
"Consumer Care was the stand-out performer," the Yorkshire, England-based firm explained.
Fortunes in the consumer arm helped push group half-year pretax profit to GBP636.5 million, up markedly from GBP204.1 million a year ago. Sales grew by 21% to GBP1.13 billion from GBP934.0 million.
International Consolidated Airlines Group fell 3.0% on Friday. The stock advanced 3.0% this week, however.
The British Airways and Iberia owner climbed to a EUR73 million pretax profit in the three months to June 30 from a whopping EUR1.12 billion loss a year before. It is IAG's first quarterly profit since the pandemic began.
Elsewhere in London, Ormonde Mining jumped 52%.
The Irish natural resource company agrees to sell its stake in the La Zarza copper-gold project in Spain for EUR2.3 million in cash to La Zarza Mineria Metalica.
The sale price is at a premium to the book value of EUR2.0 million, with Ormonde netting EUR800,000 on completion of the sale.
Brent oil was quoted at USD105.24 a barrel late Friday, down from USD107.47 late Thursday. Gold stood at USD1,763.38 an ounce, higher against USD1,755.39.
Monday's economic calendar has a series of manufacturing PMIs, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST. The week picks up speed with a Reserve Bank of Australia interest rate decision on Tuesday, the Bank of England on Thursday and the latest US jobs report on Friday.
Monday's local corporate calendar has half-year results from education publisher Pearson and banking firm HSBC.
By Eric Cunha; ericcunha@alliancenews.com
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