by Augustin Turpin
(Reuters) – European stock markets ended sharply higher on Friday, driven by good results from LVMH and Remy Cointreau, while US inflation data reinforced investors’ hopes of an imminent drop in interest rates by the Federal Reserve.
In Paris, the CAC 40 ended up 2.27% at 7,633.31 points. The British Footsie rose by 1.41% and the German Dax by 0.26%.
The EuroStoxx 50 index gained 1.09%, the FTSEurofirst 300 1.1% and the Stoxx 600 1.08%.
Data released Friday by the U.S. Commerce Department showed that consumer prices rose moderately last December, keeping the annual increase in inflation below 3 percent for a third straight month, which could allow the Federal Reserve (Fed) to start reducing its rates.
These data, which signal an easing of pressure on prices, reassured investors an hour before the bell, allowing American indices to move into the green around 4:00 p.m. GMT.
At closing time in Europe, the Dow Jones gained 0.3%, the Standard & Poor’s 500 0.2% and the Nasdaq Composite was stable.
European markets, already buoyed by a series of publications of positive quarterly results and the slightly accommodating inflection of the ECB’s comments on inflation on Thursday, also accentuated their gains at the end of the session after the publication of American data.
The better-than-expected results from LVMH particularly marked trading, the sharp rise in the stock on the Paris Stock Exchange having dragged the rest of the luxury sector and personal and household goods in its wake.
The personal and household goods compartment recorded an increase of 5.04% and the index of the ten largest European luxury stocks by 6.5%.
VALUES
LVMH closed with an increase of 12%, Remy Cointreau took 15.7%, Richemont 6.3%, Moncler 8.8%, Pernod Ricard 8%, Hermes 6% and Kering 6.7%.
TODAY’S INDICATORS
The household confidence index in France showed an increase in January, slightly exceeding estimates, according to the INSEE monthly economic survey.
Bank lending to euro zone businesses rose modestly in December, according to the latest data from the European Central Bank (ECB), raising hopes that credit growth is starting to rebound after a long period of erosion.
The ECB also said in a survey that euro zone inflation could fall faster than expected this year as economic growth remains anemic.
CHANGES
The dollar fell (-0.2%) against a basket of benchmark currencies but is on track to record a weekly gain for the fourth consecutive week, while the euro gained 0.19% to 1.0867 dollars.
RATE
Euro zone bond yields changed trajectory on Friday, rising after the release of US inflation data.
The ten-year German Bund yield rose 1.4 basis points (bps) to 2.294%.
The US bond markets are also progressing, with the ten-year Treasury gaining 0.5 bps to 4.1373%, and the two-year Treasury 3.1 bps to 4.3448%.
OIL
Oil prices fell slightly but are nevertheless heading towards a second consecutive weekly gain, driven by American economic growth data and signs of recovery in China, in a context still marked by conflicts in the Middle East and supply concerns.
Brent dropped 0.62% to 81.92 dollars per barrel, American light crude (West Texas Intermediate, WTI) losing 0.89% to 76.67 dollars.
(Written by Augustin Turpin, edited by Sophie Louet)
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