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Europe: robust growth heading into the weekend

Anna Kalmykova, Analyst, Global Markets (Finam)

On Friday, March 30, European equity benchmarks moved resolutely higher on the back of news a meeting of EU finance ministers had agreed to increase the total amount of the stabilization fund. The European Financial Stabilization Mechanism and European Financial Stability Facility were boosted from a total of EUR 500 bn to EUR 700 bn. Alongside the EUR 100 bn in bilateral loans and the funds released as part of the first aid package, the total anti-crisis firewall at the disposal of the Eurozone stands at around EUR 800 bn.

Among the macro data released, we would like to highlight February retail sales in Germany, which slowed 1.1% m-o-m in February, against a forecast rise by 1.2% m-o-m, and the Swiss Kof Leading Indicator, which hit 0.08 for March, against the average estimates of 0.04. Provisional data on Eurozone inflation shows that the CPI rallied 2.6% in March, vs. the 2.5% growth forecast, after increasing 2.7% in the previous month.

By the final bell, regional indicator STXE 600 gained 0.99% to close at 263.32. The British FTSE 100 index rose 0.46%, the German DAX gauge added 1.04% and the French CAC 40 index advanced 1.26%.

Automakers led gains among the companies on the Stoxx 600 regional indicator. Daimler added 2.1% to its market cap as Bank of America analysts issued a Buy recommendation on its shares. The automotive concerns BMW and Volkswagen climbed 2.4% and 1.5%, respectively.

Portugal’s major motorway operator Brisa Auto-Estradas de Portugal surged 14% on news its shareholders Jose de Mello and Aeif Apollo Sarl offered to buy out the remaining shares at EUR 2.66 apiece, its largest intraday gain since 1997. Cement producers HeidelbergCement and Lafarge added 4.3% and 5.2%, accordingly, on reports HSBC analysts lifted their rating for HeidelbergCement shares from Neutral to Outperform.

The shares of the Norwegian oil service company Subsea gained 2.9% in value on news the company had won a contract, worth USD 175 mn, to conduct operations at the Cheviot field.

Italy’s biggest telephone operator Telecom Italia pulled back 0.9% on the release of a negative annual report, which showed a higher-than-forecast loss blamed on the writedown of EUR 7.3 bn in goodwill.

By 07:33 am GMT, futures for key European stock indexes were up after the release of China’s manufacturing PMIs compiled by NBS and HSBC. The indexes showed an uptrend in March, easing concerns over slowing economic growth in China.

British FTSE 100 index futures for March settlement were trading 0.06% higher, German DAX index futures for March settlement were up 0.32% and French CAC 40 benchmark index futures for February settlement were 0.15% higher.

Country Value Change Change, % YTD, %
Austria 2,159.06 13.76 0.64 14.13%
Belgium 2,324.05 27.58 1.2 11.55%
United Kingdom 5,768.45 26.42 0.46 3.52%
Germany 6,946.83 71.68 1.04 17.78%
Spain 8,008.00 97 1.23 -6.52%
Italy 15,980.10 71.22 0.45 5.90%
Netherlands 323.51 2.42 0.75 3.53%
Scandinavia 1,006.39 17.74 1.69 11.85%
France 3,423.81 42.69 1.26 8.35%
Switzerland 6,235.51 59.25 0.96 5.04%