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Jan. 19, 2018, 12:50 p.m. EST

European stocks score 2 1/2-year closing high

Investors shrug off concerns over possible U.S. government shutdown

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By Carla Mozee, MarketWatch


AFP/Getty Images
Volkswagen CEO Matthias Mueller waved from a Volkswagen Sedric vehicle in October.

European stocks rose on Friday, with gains for industrial and tech shares helping the region’s benchmark bag a third straight weekly win, as investors appeared to set aside concerns about a possible shutdown of the U.S. government.

What are stocks doing?: The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +1.20% rose 0.5% to close at 400.88, marking its highest close since early August 2015, according to FactSet data.

For the week, the pan-European gauge scored a 0.6% gain, marking a third weekly advance.

In Friday’s trade, Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +1.40% rose 1.2% to 13,434.45, closing at its highest level since November last year.

France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.53%  tacked on 0.6% to 5,526.51, while Spain’s IBEX 35 /zigman2/quotes/210597995/delayed XX:IBEX +1.56%  bulked up 0.5% to 10,479.50.

The U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.25% ended up 0.4% at 7,730.79 after a choppy trade.

The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.0426%  bought $1.2236, down slightly from $1.2239 late Thursday in New York.

What’s driving markets: European stocks had a tentative start, with politics here and abroad on the radar. The session got under way and closed with news that the U.S. government may still shut down Saturday.

The U.S. House of Representatives late Thursday passed a one-month spending bill that would keep the government funded through Feb. 16. However, the measure appears to lacks support in the Senate. The current interim funding bill expires at 12:01 a.m. Eastern Time on Saturday.

But U.S. stocks didn’t seem too rattled by the prospects of a work stoppage in Washington. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.30%  was down 0.2%, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.27% was up 0.1% at the time of the European close.  

Meanwhile, members of the Germany’s Social Democratic Party on Sunday in Bonn will vote on whether the party should delve into deeper discussions with German Chancellor Angela Merkel’s conservative party about possibly forming a coalition government. Merkel hasn’t been able to put together a ruling coalition since September’s election.

Tech stocks in Europe continued to build on recent gains, with the Stoxx Europe 600 Technology Index /zigman2/quotes/210599534/delayed XX:SX8P +1.04%  up 0.8% on Friday and up 3.2% for the week. Aiding gains this week was a report that U.S. shipments of chips are set to reach $50.1 billion in 2021 .

What strategists are saying: “We expect the [EUR/USD] pair to continue to trade in a sideways manner for the short term and it could be influenced by the fundamental news regarding the possible U.S. government shutdown, as well as any further developments on the German government coalition, especially on the SPD side,” said Peter Iosif, senior research analyst at IronFX, in a note.

“Please be advised, that there is a possibility that the pair could open with a negative gap on Monday, should the SPD congress decide not to back the deal struck by SPD leadership with [Merkel’s] Christian Democratic Union and the Christian Social Union,” said Iosif.

Stock movers: Thyssenkrupp AG /zigman2/quotes/207409543/delayed DE:TKA +0.56%  climbed 4.5%, posting of the biggest gains in the DAX 30 index. CEO Heinrich Hiesinger has confirmed the steelmaker’s 2018 targets and said the company is still working on its planned joint venture with Tata Steel, according to Dow Jones Newswires.

Volkswagen AG shares /zigman2/quotes/203434344/delayed XE:VOW3 +2.75%   claimed a 2.1% rise, with Deutsche Bank saying it will take profit after a “great run” in shares of Infineon Technologies AG /zigman2/quotes/204995926/delayed DE:IFX +1.78%  and reinvest some of the proceeds into Volkswagen shares.

“DB analysts see 2018/19 as the sweet spot for VW, which they believe is yet to be fully priced,” said Deutsche Bank head of research Andrea Neubauer in a note issued Friday.

Shares of semiconductor company Infineon ended up 1% on Friday, pushing its gain to 11% so far this year.

DIY retailer Kingfisher PLC /zigman2/quotes/200571451/delayed UK:KGF +1.59% dropped 2.3% after flooring seller Carpetright PLC  issued a profit warning, sending its shares tumbling 40%.

Easyjet PLC /zigman2/quotes/202825892/delayed UK:EZJ +3.41%  rose 4.7% following a ratings upgrade to equal weight from overweight at Morgan Stanley. Air France-KLM /zigman2/quotes/205396176/delayed FR:AF +2.75%  was downgraded to equal weight from overweight, but its shares managed to gain 0.4%.

Economic data: U.K. retail sales dropped sharply in December, with the 1.5% fall nearly double the decline estimated in a poll conducted by The Wall Street Journal. The Office for National Statistics also sales in 2017 rose 1.9%, the slowest rate of annual growth since 2013.

/zigman2/quotes/210599654/delayed
XX : STOXX
369.01
+4.36 +1.20%
Volume: 0.00
Aug. 11, 2020 9:18a
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
12,865.60
+178.07 +1.40%
Volume: 5,792
Aug. 11, 2020 9:18a
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
4,984.56
+75.05 +1.53%
Volume: 5,908
Aug. 11, 2020 9:18a
loading...
/zigman2/quotes/210597995/delayed
XX : Spain: Madrid
7,163.80
+109.90 +1.56%
Volume: 21.61M
Aug. 11, 2020 9:18a
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,125.96
+75.37 +1.25%
Volume: 45,173
Aug. 11, 2020 8:18a
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/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.1744
+0.0005 +0.0426%
Volume: 0.0000
Aug. 11, 2020 3:33a
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,791.44
+357.96 +1.30%
Volume: 362.50M
Aug. 10, 2020 5:12p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,360.47
+9.19 +0.27%
Volume: 2.57B
Aug. 10, 2020 5:12p
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/zigman2/quotes/210599534/delayed
XX : STOXX
572.00
+5.87 +1.04%
Volume: 0.00
Aug. 11, 2020 9:18a
loading...
/zigman2/quotes/207409543/delayed
DE : Germany: Frankfurt
7.50
+0.04 +0.56%
Volume: 1,700
Aug. 11, 2020 9:02a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€227,908
loading...
/zigman2/quotes/203434344/delayed
XE : Germany: Xetra
136.78
+3.66 +2.75%
Volume: 142,255
Aug. 11, 2020 9:18a
P/E Ratio
13.01
Dividend Yield
3.55%
Market Cap
€69.83 billion
Rev. per Employee
€354,929
loading...
/zigman2/quotes/204995926/delayed
DE : Germany: Frankfurt
21.97
+0.39 +1.78%
Volume: 2,675
Aug. 11, 2020 9:15a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€194,374
loading...
/zigman2/quotes/200571451/delayed
UK : U.K.: London
£ 267.90
+4.20 +1.59%
Volume: 152,352
Aug. 11, 2020 8:18a
P/E Ratio
787.94
Dividend Yield
N/A
Market Cap
£5.56 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202825892/delayed
UK : U.K.: London
625.00 p
+20.60 +3.41%
Volume: 546,147
Aug. 11, 2020 8:18a
P/E Ratio
10.28
Dividend Yield
7.02%
Market Cap
£2.61 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205396176/delayed
FR : France: Euronext Paris
4.18
+0.11 +2.75%
Volume: 728,426
Aug. 11, 2020 9:18a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
€1.64 billion
Rev. per Employee
€328,953
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Carla Mozée is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee.

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