European Indexes Trim Weekly Losses On a Rebound in Banks and Resource Stocks

Lucy Stoeva
08 Apr, 2016
New York City

European stocks made a strong comeback on Friday and trimmed weekly losses in market indexes as Italian banks rallied and rising oil prices buoyed energy stocks. German trade surplus increased to

[R]4:00 PM Frankfurt, Germany – European stocks made a strong comeback on Friday and trimmed weekly losses in market indexes as Italian banks rallied and rising oil prices buoyed energy stocks. German trade surplus increased to €19.8 billion on strong growth in exports. Air France-KLM reported a rise in passenger traffic in March.[/R]

European equities made a strong comeback on Friday as rising oil prices buoyed energy stocks and Italian banks rallied. Nevertheless, most major indexed ended the week with a loss.

Oil prices rose on positive indications for the global economy. U.S. Federal Reserve Chair Janet Yellen said that the U.S. economy was not a bubble and the economy was on a solid course.

Brent crude oil futures soared 5.7% to $41.67, while WTI crude oil futures rose 5.6% to $39.35.

Oil and energy stocks surged, with Royal Dutch Shell up 3.9%, BP gaining 3.7%, Total adding 3.4%, and Statoil closing 2% higher.

Metals prices advanced as well, fueling growth at major U.K. mining stocks. Shares of Glencore, BHP Billiton and Rio Tinto gained of 3% to 5% for the day.

Italian banks also recorded solid gains on expectations about an upcoming government fund that would buy non-performing loans and support the recapitalization of the banks.

Shares of UniCredit, the largest Italian bank in terms of assets, soared 9.7%. Banca Popolare di Milano, Banco Popolare and Banca popolare dell''Emilia Romagna jumped by more than 10% each.

On the negative side, companies that went ex-dividend, or traded without the latest dividend payout, declined. Swisscom lost 3.9% and Gjensidige tumbled 5.5%.

In Germany, the trade surplus increased unexpectedly to €19.8 billion in February from €18.7 billion in January, according to data from the Federal Statistical Office.

Total exports grew 1.3%, while imports inched up 0.4% from the previous month. The current account balance indicated a surplus of €20 billion in February, compared with €16.3 billion a year ago.

In the U.K., however, industrial production dropped 0.5% from a year ago in February, the largest decline in three years, the Office for National Statistics said.

The decline, which compares with a gain of 0.2% gain in the previous month, was due to 1.8% drop in manufacturing from a year ago.

In London, FTSE 100 index was up 67.52, or 1.10%, to 6,204.41, its highest level in 2016. The index is up 1% for the week.

In Frankfurt, the DAX index gained 91.64, or 0.96%, to 9,622.26. On a weekly basis, the index lost 2.7%.

In Paris, the CAC 40 index advanced 57.21, or 1.35%, to 4,303.12. The benchmark is down 1.5% for the week.

In Milan, FTSE MIB index, advanced 4.1% to 17,504.62, outperforming the other markets in Europe. For the week, the Italian index is down 0.8%.

Telecom Italia SpA jumped 6.3% to €0.89 after Vivendi which controls the 24.9% in the telecom carrier, said the company doesn’t need to raise capital through a rights offering for new investments.

Air France-KLM SA added 2% to €8.1 after the airline reported an increase in passenger traffic in March.

Royal KPN NV lost 2.8% to €3.46 on media reports that competitor Deutsche Telekom is adopting a new strategy to revive its struggling Dutch unit.