European stocks ended a volatile session marginally lower on Friday, as losses in the consumer-goods sector contributed to pulling the regional market away from a seven-week high.
But U.K. stocks fared better, helped by a drop in the pound’s value after Bank of England Governor Mark Carney threw into doubt the possibility of a rate hike in May.
How indexes are moving
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.89% fell 0.03% to end at 381.84, slipping from its highest close since Feb. 27 logged on Thursday.
For the week, the Stoxx 600 bagged a 0.7% gain, its fourth consecutive weekly advance.
In Frankfurt, the DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +1.34% ended down 0.2% to 12,540.50, but rose 0.8% for the week. France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.45% ended 0.4% higher at 5,412.83, extending its weekly win to 1.8%.
But the U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.76% outperformed its rivals, adding 0.5% to 7,368.17, aided by the drop in the pound’s value. It rose 1.4% for the week.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.8122% changed hands at $1.2285, down from $1.2345 late Thursday in New York. Against the pound, the shared currency /zigman2/quotes/210561182/realtime/sampled EURGBP +0.1150% rose to £0.8755 from £0.8766.
What’s driving the market
A new wave of earnings reports rolled in for assessment on Friday. Shares in the consumer-goods sector continued to struggle on Friday, with Reckitt Benckiser Group PLC under pressure after a sales gauge for the maker of Lysol disinfectant and other consumer brands fell short of expectations.
That sector lost ground on Thursday, as concerns about weak pricing power hurt shares of Dove soap maker Unilever PLC /zigman2/quotes/205449809/delayed UK:ULVR -0.73% , and tobacco stocks fell after Philip Morris International Inc. /zigman2/quotes/201611010/composite PM +0.61% shares plunged in the U.S. on a decline in cigarette sales volume.
But U.K. stocks moved higher Friday as a whole as the pound fell against major rivals. Sterling dropped after Carney said he didn’t “want to get too focused on the precise timing” of an interest-rate hike, citing uncertainty over Brexit and recent disappointing retail and inflation data. The market had been pricing in a rate increase at the BOE’s meeting on May 10.
A weaker pound can help lift the British blue-chip index, as its multinational companies generate most of their sales in foreign currencies.
What strategists are saying
“The rather lackluster figures [for Reckitt Benckiser] highlight the struggles that consumer goods companies are facing as increased competition from drugstore chains and e-tailers such as Amazon often means price increases are out of the question,” said Fiona Cincotta, senior market analyst at City Index, in a note.
Stocks in focus
Reckitt Benckiser shares dropped 2.8% after the first-quarter like-for-like sales growth at the consumer products maker came in at 2%, falling short of expectations of 2.6% growth.
Ericsson AB shares /zigman2/quotes/207544813/delayed SE:ERIC.B +0.85% /zigman2/quotes/208932705/composite ERIC +1.53% surged 18%, scoring their best session since 2002, after the Swedish telecommunications-equipment maker posted a narrower first-quarter net loss of SEK837 million.
ASM International NV /zigman2/quotes/201180544/delayed NL:ASM +4.71% sank 8.4%. The Dutch semiconductor firm said first-quarter sales of €159 million “were at the lower end of our guidance while order intake was at the higher end of our guidance.”
Telia Co. AB /zigman2/quotes/208009172/delayed SE:TELIA +0.39% jumped 8.6% after the Nordic telecommunications operator raised its cash-flow guidance and launched a 15 billion Swedish kronor ($1.79 billion) share buyback program.
Shire PLC fell 3.8% after Allergan PLC late Thursday said it doesn’t plan to make a bid for the Dublin-based drugmaker. Meanwhile, Japan’s Takeda Pharmaceutical Co. said Friday it had sweetened its offer to buy Shire, just a day after the British drugmaker rejected a bid from the rival pharma company.