Positive week for European stocks

A busy week of corporate earnings and solid economic data helped lift European stocks into positive territory for the week. The STOXX Europe 600 Index ended the week higher, almost touching a 10-year high midweek before it receded. The German index DAX 30 reached an all-time high. Spain’s IBEX 35 ended flat but was strengthened early in the week, as sentiment improved after a lack of a violent reaction to the Spanish government taking control in Catalonia over the weekend.

On November 2, the Bank of England’s (BoE) monetary policy committee voted 7-2 in favor of increasing the bank rate to 0.50% from 0.25%. The central bank said in its monetary policy summary that it would adopt a cautious approach to any future hikes. The BoE also warned that there “remain considerable risks to the outlook, which include the response of households, businesses and financial markets to developments related to the process of the European Union withdrawal. The BoE now expects gross domestic product (GDP) growth over 2017 to be 1.6%, down slightly from its last forecast of 1.7%.

The major Japanese stock market benchmarks advanced, marking their eighth consecutive week of gains. The Nikkei 225 Stock Average advanced 2.41% this week. The Nikkei 225 is up 17.92% for the year to date.

Analysts’ 12-month outlook for European equities’ earnings has been rising since mid2016 and is now the highest since September 2011. The Stoxx Europe 600 Index is up 9.4 percent this year, compared with a 15 percent increase in the S&P 500.

European Central Bank President Mario Draghi cited the region’s “increasingly robust and broad-based economic expansion” at the institution’s October meeting, as he put the ECB’s signature stimulus measures on the road to a gradual exit.

Euro-area economic confidence surged to its highest in almost 17 years in October. The unemployment rate inched lower in September as the economy expanded for an 18th consecutive quarter.