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HomeLatestEuropean Stocks Ascend on Positive Sentiment Fueled by UK Growth Data
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European Stocks Ascend on Positive Sentiment Fueled by UK Growth Data

European stock markets experienced a surge on Friday, buoyed by stronger-than-anticipated U.K. growth figures that contributed to an overall positive market sentiment.

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At 03:05 ET (07:05 GMT), Germany’s DAX index saw a 0.4% increase in trading, while France’s CAC 40 surged by 0.5%, and the FTSE 100 in the U.K. climbed by 0.4%.

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Britain’s Economy Emerges from Recession in Q1

The close of the week witnessed European markets ending on an upbeat note, as hopes for rate cuts by the U.S. Federal Reserve were reignited, further boosting market confidence.

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Adding to the optimistic outlook, recent data released on Friday revealed that the U.K.’s economy expanded by a robust 0.6% during the first quarter of 2024, surpassing the projected 0.4% growth. This growth effectively marked the end of the shallow recession that had gripped the nation in the latter half of the previous year.

Notably, March saw a monthly economic growth of 0.4%, outpacing expectations of a 0.1% increase.

While the Bank of England maintained interest rates at a 16-year high during its Thursday meeting, two members of the nine-person committee advocating for rate cuts indicated a shift in sentiment, signaling the bank’s inclination towards lowering interest rates further.

Market indicators suggest a 45% probability of a rate cut at the upcoming policy meeting next month, with approximately 58 basis points of easing projected by year-end.

European Central Bank’s Monetary Policy Meeting in Focus

Later in the session, the European Central Bank is scheduled to release the account of its most recent monetary policy meeting. With a rate cut anticipated in June, investors are keen to discern any hints regarding the timing of subsequent cuts throughout the year.

Confidence in Corporate Sector

In the corporate realm, IAG (BME:ICAG) shares rose by 2% after the airline group announced a first-quarter operating profit of €68 million, marking a significant surge from €9 million recorded during the same period last year. The parent company of British Airways, alongside Iberia and Aer Lingus, also reported a notable increase in first-quarter revenue, affirming its readiness for the upcoming peak summer travel season.

Meanwhile, Mediobanca (OTC:MDIBY) witnessed a 3% rise in its stock value following the Italian lender’s report of a 42% surge in net profit during the January-March period compared to the previous year. Additionally, the company announced plans to distribute E421 million as an interim dividend this month.

Optimism in Energy Markets

On the energy front, crude prices rallied on Friday, poised for a weekly gain, propelled by data from the U.S. and China— the world’s largest crude consumers— indicating an uptick in demand.

As of 03:05 ET, U.S. crude futures surged by 0.9% to $79.94 per barrel, while the Brent contract climbed by 0.7% to $84.50 per barrel. Both contracts were on track to register approximately 2% gains for the week, following substantial losses in the preceding week.

Encouraging overall import data from China, coupled with a decline in U.S. crude inventories, instilled optimism regarding an improvement in global oil demand.

Additionally, gold futures saw a 1.5% increase to $2,376.40/oz, while EUR/USD remained flat at 1.0782.

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