European Stocks Advance, Trimming Worst Weekly Decline in Seven
European stocks rose on Friday, trimming the worst weekly decline in seven, as investors weighed the prospects of a global economic recovery against the risk of rising inflation.
Market Overview
The Stoxx Europe 600 Index rose 0.7% at the close of trading, after dropping as much as 0.5% earlier in the day. The benchmark gauge is still down 2.2% this week, its worst performance since the week ended April 2.
The Stoxx 600 has gained 4.3% this year, with the rally driven by optimism that the global economy is on the mend. But the rally has been tempered by concerns that rising inflation could lead to higher interest rates and erode corporate profits.
Sectors
The Stoxx 600 was led higher by technology and consumer discretionary stocks, which rose 1.2% and 1.1%, respectively. Banks and energy stocks were the biggest laggards, falling 0.5% and 0.4%, respectively.
Individual Stocks
Among individual stocks, shares of Deutsche Bank AG rose 2.2% after the German lender said it would cut costs and reduce its workforce.
Shares of Volkswagen AG rose 1.3% after the German automaker said it would invest more than $50 billion in electric vehicles and digital services over the next five years.
Shares of Airbus SE rose 1.7% after the European aerospace giant said it would increase production of its A320neo jetliner.
Currencies
The euro was little changed at $1.2122. The British pound was also little changed at $1.4115.
Bonds
The yield on 10-year German government bonds was little changed at -0.25%.
Commodities
West Texas Intermediate crude rose 0.3% to $66.19 a barrel.
Outlook
Investors are closely watching the economic data for signs of a global recovery. The U.S. economy is expected to grow at its fastest pace in more than a decade this year, while the euro area is expected to expand at its fastest pace since 2007.
At the same time, investors are concerned that rising inflation could lead to higher interest rates and erode corporate profits. The European Central Bank is expected to keep interest rates on hold at its meeting next week, but could signal that it is preparing to raise rates later this year.
The outlook for the global economy remains uncertain, and investors will be closely watching the economic data for signs of a recovery. In the meantime, the markets will remain volatile as investors weigh the risks and rewards of investing in European stocks.