European stock markets pushed higher Friday, regaining some of the previous session’s sharp losses, but are still set to end the week in the red amid growing concerns about the strength of the global economic recovery.
Concerns that rising numbers of Covid-19 cases, primarily in southeast Asia but also in the more highly-vaccinated west, will blunt progress on the economic recovery have hit sentiment of late.
The major indices in Europe closed sharply lower Thursday, with the DAX in Germany and the FTSE 100 in the U.K. falling 1.7% and the CAC 40 in France dropping 2%. Even with Friday’s advances these major indices are still set to end the week around 1% lower, underperforming the U.S. this week – a reminder of how much more heavily weighted growth-sensitive cyclical stocks are in the Old Continent.
Further evidence of the patchy recovery came with the U.K.’s May flash GDP release which showed growth of just 0.8% on the month, a sharp slowdown from 2.0% growth seen the previous month (a figure that was also revised lower). Manufacturing Output fell 0.1% in May, while industrial production rose 0.8%, both much weaker than had been expected.
News that U.S. drugs giant Pfizer and German partner BioNTech are developing a Covid-19 booster shot intended to target the highly transmissible delta variant has provided a lift Friday. BioNTech’s stock rose 5% as a result.
In corporate news, Philip Morris International announced plans to buy Vectura Group in a deal valuing the maker of inhalers at 1.05 billion pounds ($1.44 billion) and trumping Carlyle Group ‘s 958 million pound offer made in May. The deal fits a recent pattern of U.S. private and public investors vying for U.K. assets that have been left looking cheap by four years of post-Brexit uncertainty.
Elsewhere, Senior stock rose 0.8% after the U.K. engineering group lifted its full-year forecast, citing “clear signs of recovery” in the aerospace and the oil and gas sectors.
The FTSE MIB climbed up by 2.06% to 24,864.71. In the cash markets, the DAX futures Germany was trading up 0.74% to 15,533.17. CAC 40 futures in France rose by 1.38% to 6,484.60 while the FTSE 100 futures in the U.K. were up by 0.59% to 7,073.97. ,at the time of writing.