By Barbara Kollmeyer
European equities traded higher on Friday, as investors kept hopes alive for an American stimulus deal, at the end of a positive week for markets.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -2.03% rose 0.4% and is up 1.5% for the week, with one more session to go. The German DAX /zigman2/quotes/210597999/delayed DX:DAX -2.17% was flat, while the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -1.98% rose 0.5%, and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -2.15% gained 0.8%.
U.S. stock futures /zigman2/quotes/208225921/composite SP -0.27% /zigman2/quotes/210598365/realtime COMP -2.55% rose across the board, following on from Thursday’s gains , on fading worries over a contested election outcome and hopes for over a stimulus package, even if it doesn’t arrive until after that battle for the White House.
President Donald Trump said on Thursday that stimulus talks with Democrats have turned productive , following his decision just days earlier to call them off. Hours later, Speaker of the House Nancy Pelosi said she still wanted a big deal .
“EU stocks will continue to be fuelled by U.S. stimulus hopes and expectations of a ‘blue wave’ that is currently viewed as a stimulus friendly outcome at the November U.S. election,” said Stephen Innes, chief global market strategist at AxiCorp. “The recent rise in COVID-19 cases in Europe/ and tighter restrictions continued to generate lots of headlines but not much market reaction.”
Elsewhere, a private gauge of China’s services-sector activity showed faster-than-expected growth in September. Mining shares, sensitive to news about China, a big consumer of natural resources, were higher. Shares of Anglo American UK:AAL rose nearly 5% and BHP /zigman2/quotes/203323256/delayed UK:BHP -1.73% gained 2.3%.
Economic news was less positive for the U.K., where the economy grew just 2.1% in August , disappointing forecasts for growth of 4.6%, and the slowest monthly gain since the initial coronavirus lockdowns. France reported a slowing pace of industrial production in August.
Rising oil prices were lifting shares of heavily-weighted oil companies. Oil prices finished higher on Thursday as Hurricane Delta forced the shut-in of more than 90% of crude output in the Gulf of Mexico. Crude prices were steady on Friday.
Shares of Total /zigman2/quotes/201824152/composite TOT -1.32% , Royal Dutch Shell /zigman2/quotes/201538663/delayed NL:RDSA -2.34% , and BP /zigman2/quotes/202286639/delayed UK:BP -1.95% all rose more than 1%.
European semiconductor-related stocks rose after shares of NXP Semiconductors /zigman2/quotes/202999625/composite NXPI -4.49% rallied late in the U.S. on Thursday, due to a higher outlook . And Advanced Micro Devices /zigman2/quotes/208144392/composite AMD -3.58% is in advanced talks to buy rival chip maker Xilinx in a deal that could be worth more than $30 billion, The Wall Street Journal reported , citing people familiar with the matter.
Shares of Infineon Technologies /zigman2/quotes/203152288/delayed XE:IFX -2.38% and ASM International gained 3% each, and those for Dialog Semiconductor /zigman2/quotes/202268164/delayed XE:DLG -0.18% rose 1.2%, and ASML Holding /zigman2/quotes/210293876/composite ASML -4.75% rose 1.7%.
Shares of Rolls-Royce Holdings /zigman2/quotes/203646520/delayed UK:RR -4.52% were again rising, up 13%. Shares have gained 95% this week, but remain 67% lower year to date.
The London Stock Exchange has agreed to sell its entire shareholdering in the parent company of Borsa Italia to Euronext /zigman2/quotes/208368645/delayed FR:ENX -0.06% in a deal valued at €4.33 billion ($5.09 billion) . LSE shares rose 0.8%, while Euronext stock rose 0.9%.
On the downside, shares of BASF /zigman2/quotes/203188900/delayed IT:BASF -2.72% fell more than 2%, after the German chemicals giant warned on Friday of a big write-down due to declining demand in the automotive and aviation industries
BASF said it will lose €2.12 billion in the third quarter , mostly due to a €2.8 billion write-down.