European stocks close higher on back of solid earnings; Trump speaks at Davos
European stocks closed higher on the last trading day of the week, as investors digested new earnings reports.
The pan-European STOXX 600 closed provisionally almost half a percent higher on Friday, with almost all sectors moving into the black. European bourses were higher, with France’s CAC 40 outperforming fellow indexes on the back of strong earnings.
Luxury brand LVMH rose almost 4.9 percent after reporting that revenue had increased by 13 percent, compared to the previous year, coming in at 42.6 billion euros for 2017. The group added that it was “cautiously confident” for 2018, despite uncertainties surrounding geopolitics and fluctuations in the currency market.
Other French luxury makers rose near the top of the STOXX 600 on the back of LVMH’s results, with Christian Dior up more than 4 percent and Kering up more than 2 percent.
At the other end of the benchmark, Gjensidige, sunk 6.6 percent after the insurer posted fourth-quarter profits that came in below expectations.
Aryzta and SES both dropped sharply, off 8.9 and 5.7 respectively, after brokers cut target prices on both of the stocks.
On Wall Street, stocks opened higher on better-than-expected quarterly earnings and economic data released by the Commerce Department.
President Donald Trump addressed world leaders in a speech at the World Economic Forum (WEF) in Davos, Switzerland, on Friday. Trump told the conference that the U.S. wanted “fair” and “reciprocal” trade, criticizing countries that he said “exploit” others in trade deals.
German Chancellor Angela Merkel is scheduled to meet Social Democratic Party leader Martin Schulz and other politicians as the curtain lifts on the latest round of coalition talks to form the next government.
Rallies in major currencies made headlines Thursday as Trump told CNBC that “The dollar is going to get stronger and stronger,” while European Central Bank President Mario Draghi said that there were “very few chances” that the institution would change interest rates this year.
The euro held on to gains made in the previous session and was up 0.23 percent versus the U.S. dollar Friday, at $1.2423. The single currency had surged to the $1.25 level Thursday after Draghi delivered a press conference on the ECB’s latest monetary policy decision.
The dollar, meanwhile, traded 0.34 percent lower Friday against a basket of major currencies, after U.S. Treasury Secretary Steven Mnuchin said his comments on the dollar’s weakness were taken out of context.
On the data front, U.K. gross domestic product (GDP) data showed that the British economy had accelerated during the last three months of 2017, rising 0.5 percent according to data by the Office of National Statistics.
The data beat analysts’ forecasts, with a Reuters poll of economists expecting quarterly growth to remain at 0.4 percent.
Source: CNBC
