By Barbara Kollmeyer
European stocks look set to log their biggest one-day gain in a week on Friday, driven by spillover from a positive Wall Street session after upbeat U.S. economic data.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -0.54% climbed 0.8% to 425.93 after a modest decline on Thursday. The index is flat for the week. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.09% jumped 0.7%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.47% rose 0.4%, and the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.42% gained 0.7%. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0079% and euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0456% were both higher against the dollar.
U.S. stocks /zigman2/quotes/210598065/realtime DJIA -0.16% /zigman2/quotes/210599714/realtime SPX -0.20% /zigman2/quotes/210598365/realtime COMP -0.07% traded higher early Friday, brushing aside data showing the biggest decline in consumer spending in 10 months for February, due to winter weather and a lull in government stimulus payments. New federal checks are expected to spark a rebound in spending over the coming months.
That follows Thursday’s session that saw U.S. stocks bounce back from deep declines to end higher, inspired by better-than-expected weekly jobless claims. President Joe Biden also announced a new U.S. COVID-19 vaccination target of 200 million shots during his first 100 days in office.
Mining and oil names were leading the gains in Europe, with shares of BP /zigman2/quotes/202286639/delayed UK:BP +0.31% /zigman2/quotes/207305210/composite BP +0.34% and Royal Dutch Shell up 2% each, and Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO -1.15% shares up 3%. Also helping energy names was a more than 2% rise in oil prices /zigman2/quotes/211629951/delayed CL.1 +1.19% , which climbed as a giant shipping container remained lodged in the crucial Suez Canal waterway .
Shares of shipping giant AP Moeller Maersk /zigman2/quotes/202892434/delayed DK:MAERSK.B -1.30% surged 4%, tracking similar gains for some Asian shipping companies.
On the data front, U.K. retail sales climbed 2.1% in February. Meanwhile, the U.K. government on Thursday voted to extend coronavirus emergency powers until September, while also approving the government’s plan to gradually ease the lockdown over the next three months.
Elsewhere, German business sentiment beat expectations and reached its highest level since June 2019, the Ifo Institute said on Friday. That is as Germany continues to struggle with its third wave of the coronavirus disease and a slow vaccine rollout for the European Union.
Germany is set to label France as a high-risk zone for COVID-19, Chancellor Angela Merkel said on Thursday, which has sparked some concerns the country will tighten up its border controls with France.
Andrew Kenningham, chief Europe economist at Capital Economics, cautioned against reading too much into the data, as “the rest of the economy is faring less well, and the extension of the virus restrictions means a sustained recovery is unlikely until the second half of the year.”
Banks were climbing, led by a 2.6% gain for Banco Santander /zigman2/quotes/205677933/delayed ES:SAN +0.58% /zigman2/quotes/202859081/composite SAN -1.23% after the Spanish lender said late on Thursday that its board has approved a dividend of 2.75 European cents (3.23 U.S. cents) a share to be paid in cash.
Europe also got some mergers and acquisitions news, as U.K. multinational insurer Aviva /zigman2/quotes/210517151/delayed UK:AV -0.65% announced the sale of its Polish unit to German insurer Allianz /zigman2/quotes/210095234/delayed XE:ALV +0.20% for €2.4 billion. Aviva shares rose 0.9% and Allianz shares gained 0.7%.