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European stocks edge higher; U.K. GDP, Richemont earnings in focus

Published 05/12/2023, 04:30 PM
© Reuters.
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Investing.com - European stock markets traded higher Friday as investors digested mixed U.K. growth data as well as more quarterly corporate earnings.

At 04:15 ET (08:15 GMT), the DAX index in Germany traded 0.4% higher, the FTSE 100 in the U.K. climbed 0.3% and the CAC 40 in France rose 0.8%.

Data released Friday showed that the U.K. economy grew by 0.1% in the first three months of 2023, despite an unexpectedly sharp 0.3% drop in output in March.

"The fall in March was driven by widespread decreases across the services sector," ONS statistician Darren Morgan said earlier Friday.

The Bank of England lifted interest rates by 25 basis points on Thursday to the highest level since 2008 as it combats inflation at highly elevated levels, but also mentioned the resilience of the economy as it upgraded its growth projections.

Data from France and Spain confirmed that inflation remained elevated in these two major Eurozone countries.

The European Central Bank also hiked interest rates last week and signaled more increases lie ahead, with ECB President Christine Lagarde stating Thursday that the central bank’s efforts to curb inflation aren’t over.

The earnings season continued Friday.

Richemont (SIX:CFR) stock rose over 5%, climbing to an all-time high, after the Swiss luxury group expressed confidence in benefiting strongly from a recovery in Chinese demand.

Societe Generale (EPA:SOGN) stock rose 0.9% after the French lender beat quarterly earnings estimates as its bond trading offset a slump in retail banking.

Allianz (ETR:ALVG) stock fell 0.4% despite the German financial services company posting a healthy jump in first-quarter net profit, rebounding after taking charges a year ago for a U.S. funds scandal, weighed by weakness in its asset management division.

Norwegian Air Shuttle (OL:NAS) stock fell 4.7% after the budget carrier reported a first-quarter loss, with this outweighing strong summer booking numbers.

Oil prices fell Friday, and are on course for four consecutive weeks of declines on worries that the U.S. economy is heading towards recession coupled with lingering fears over a slow recovery in China's fuel demand. 

However, speculation that the U.S. could repurchase oil for its heavily-depleted Strategic Petroleum Reserve if prices consistently trade around $70 a barrel is providing a degree of support.

By 04:15 ET, U.S. crude futures traded 0.8% lower at $70.33 a barrel, while the Brent contract dropped 0.8% to $74.36. Both benchmarks are currently set to drop around 1% this week.

Additionally, gold futures were down 0.3% to $2,013.90/oz, while EUR/USD traded 0.1% lower at 1.0910.

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