Italy’s rebound pulls European stocks out of loss, virus concerns remain
Italian stocks pulled Europe out of early losses on Friday as data pointed to a strong rebound in May industrial output, but a spike in coronavirus cases globally continued to weigh on investor sentiment.
The pan-European STOXX 600 rose 0.4% by 0829 GMT after starting the day lower.
Milan stocks .FTMIB jumped 0.7% as Italy reported a rise in production of 42.1% in May from the month before, almost double of what economists were predicting.
France’s CAC 40 .FCHI rose 0.3% after production at French factories, mines and water-treatment plants jumped an unprecedented 19.6% in May.
Still, the STOXX 600 was flat for the week as investors feared more business shutdowns, particularly in the United States where more than 60,500 new COVID-19 infections were reported on Thursday.
A rally in Shanghai stocks that had supported global markets earlier this week also stalled due to rising tensions between Washington and Beijing and as the country’s state funds announced stake cuts in companies. [.SS]
“Europe looks set to finish the week very much on the back foot, as it becomes increasingly apparent that any economic recovery is unlikely to be V-shaped in nature, with a wide range of companies starting to announce thousands of job losses this week,” said Michael Hewson, chief market analyst at CMC Markets.
Swiss duty free operator Dufry (DUFN.S) fell 7.3% after announcing cuts to personnel expenses by 20% to 30% this year.
British high street names Boots and John Lewis also announced jobs cuts on Thursday.
Investors are awaiting the second-quarter earnings season next week to gauge the economic damage wreaked by the coronavirus crisis. Analysts are expecting a 53.9% fall in profit for companies listed on the STOXX 600.
Focus is also on a European Central Bank meeting and a European Union summit next week, with hopes running high that a 750 billion euro ($851.70 billion) coronavirus recovery fund will be approved by the member states.
Technology .SX4P surged 0.8% after Wall Street’s tech-heavy Nasdaq hit a record high, while real estate .SX86P and chemical .SX4P companies were among the biggest sectoral gainers.
Danish brewer Carlsberg (CARLb.CO) gained 4.7% as it said its main China market had rebounded strongly during the quarter, but posted a 15% drop in second-quarter sales.
