October 4, 2023

Europe close: Stocks finish the week near recent highs, Travel and Leisure names lead

European stocks finished the week on an up note tracking gains on Wall Street to…

Europe close: Stocks finish the week near recent highs, Travel and Leisure names lead

European stocks finished the week on an up note tracking gains on Wall Street to new record highs, although shares in Britain and Germany were off the pace on Covid-19 concerns and weak economic data respectively.

The Stoxx 600 was flat for the day, even as Travel&Leisure names hit fresh post-pandemic highs.

Boosting that sector in particular were the most recent figures for new Covid-19 infections showing a flattening out of the curve in France while in Spain they were now clearly starting to decline.

Nevertheless, the recent appearance of new virus strains meant that analysts remained of a somewhat cautious bent, particularly regarding the immediate near-term outlook.

Germany’s DAX drifted lower by 0.03{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} to 14,056.72 alongside while the FTSE Mibtel climbed 0.8{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} to 23,083.42.

Weighing on the Dax was data showing that orders for German-made goods fell more than expected in December, as restrictions to contain the Covid-19 pandemic dragged down demand from other Eurozone countries.

London’s FTSE 100 was in similar territory as investors tried to decipher the government’s chaotic quarantine policy for passenger arrivals. With the on-off-on announcement now delayed until next week, ministers were reportedly scrambling to book 28,000 hotel rooms.

The day before, hotel industry representatives claimed they had offered to hold talks with Downing Street on the best approach and were still waiting for a response.

Optimism over the creation of a unity government in Rome was still the main catalyst behind the advance in Italian shares.

France’s cac-40 was also higher, by 0.9{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} to 14,056.72 after President Emmanuel Macron stated that a lockdown in France would be the ‘last resort’.

Investors were also awaiting the US payrolls report later on Friday, along with the unemployment rate and average earnings.

“This week’s market performance in Europe has been slightly more subdued largely down to uncertainty about the speed of Europe’s vaccine rollout plan, however that hasn’t stopped the DAX from closing in on its recent record high,” pointed out CMC Markets UK analyst Michael Hewson.

“The FTSE100 has had a more subdued week lagging behind due to disappointment over this week’s earnings announcements from the likes of BP, Royal Dutch Shell and Unilever, which have acted as a drag, along with a stronger pound. “

“On the plus side it’s been a decent week for the UK banking sector, as a combination of higher yields, and optimism over the UK’s vaccine rollout pushes the likes of NatWest Group and Lloyds to three-week highs.”

In equity news, shares in Beazley surged after it posted an annual pre-tax loss that was smaller than expected. The Lloyd’s of London insurer swung to a loss of $50.4m in the year to the end of December from a profit of $267.7m a year earlier as it was hit by $340m of losses from the pandemic, but this was better than consensus expectations for a $106.4m loss.

Hewson attributed the share price rise to a 19{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} rise in gross premiums and management optimism about a return to paying a dividend.

On the downside, Signature Aviation fell after Global Infrastructure Partners teamed up with rival bidders Blackstone and Microsoft founder Bill Gates to make a $4.73bn (£3.43bn) bid the company.

Sanofi gained as the French drugmaker said it aimed to grow earnings per share this year after posting stronger-than-expected quarterly results.

BNP Paribas gained as charges linked to the pandemic ate into the lender’s net profit in the fourth quarter.

Shares in Vinci rose 6{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} as the European construction and concessions giant beat full-year core profit forecasts, helped by some recovery in its contracting business.