European markets close lower, gains in focus

European markets closed lower on Friday as investors reacted to fresh earnings and geopolitical tensions.

The pan-European Stoxx 600 ended down 0.18 percent with most sectors in negative territory. The European stocks benchmark moved 2.36 percent higher on the week. The French CAC 40 ended the trading week over 4.2 percent higher on the back of centrist presidential candidate, Emmanuel Macron’s first round victory in the French election.

While Germany’s DAX surged 3.2 percent and the U.K.’s FTSE 100 moved up 1.4 percent for the week. Telecom stocks were the worst performers on Friday.

Commerzbank analysts suggested the reportedly lower risk of far-right presidential victory in France could see a merger between Orange and Bouygues Telecom.

On the other hand, basic resources stocks led the gains on positive sentiment in the copper industry.

However, corporate earnings remained investors main focus on Friday as a number of banks reported their latest figures. UBS said Friday its net income rose 79 percent in the first quarter of this year. The bank’s shares ended up over two percent on Friday.

RBS also reported a better than expected quarterly figures with a profit of £259 million ($334.24 million), after posting a net loss of £968 million a year ago. It jumped 4.7 percent to close as one of the best-performing stocks on Friday.

In Spain, Caixabank posted a 48 percent increase in first-quarter profits, sending its shares 3.3 percent higher.

Barclays said its first-quarter profit doubled but it missed out on a bond trading boom. Its shares slipped more than 5 percent on Friday.

In other corporate earnings news, Sanofi reported business net income, adjusted to exclude acquisitions and divestments, increased by 4 percent and an 11 percent jump in sales. Its shares closed slightly higher.

In the U.S., the Dow Jones industrial average and broader S&P 500 both continued under pressure on Friday following data which showed the economy grew at its weakest pace in three years. Meanwhile, gains in Amazon.com and Google parent company Alphabet launched the Nasdaq composite index to hit a fresh record high on Friday.

President Donald Trump said Thursday a major conflict with North Korea remained a possibility although stressed he would prefer to find a diplomatic solution to increasing tensions.

In terms of data, euro zone inflation jumped to 1.9 percent in April from 1.5 percent in March driven by energy prices, flash data showed Friday. Inflation is now at its highest level since 2013. The euro moved 0.3 percent higher to reach $1.0936 during afternoon trade.

In the U.K., economic growth slowed to a one-year low of 0.3 percent from 0.7 percent in the last three months of 2016, the Office for National Statistics said on Friday.

Source: CNBC