Europe’s STOXX 600 logs weekly gains

Europe’s main stock indices were flat on Friday, but notched strong gains over the week that saw record highs from German and French shares, while investors also analysed a US jobs report for clues on the global monetary policy outlook.

The pan-European STOXX 600 closed flat, notching an all-time high and its seventh straight weekly advance.

France’s benchmark CAC 40 hit a record high on Friday, while Germany’s DAX touched an all-time high in the previous session.

Real estate climbed 2.1%, leading sectoral gains. Technology lost 1.6% after BE Semiconductor slumped 16.1% on a media report that Joint Electron Device Engineering Council lowered certain chip standards which might delay investments into hybrid bonding technology.

On the data front, US job growth accelerated in February, but downward revisions to employment gains in the prior two months and an increase in the unemployment rate suggested a slowing labour market.

“It’s one of those numbers that depend on whether you are a bull or a bear, and for the market it has been a relatively positive one as the data doesn’t suggest that the US economy is falling off a cliff,” Barclays Private Bank chief market strategist Julien Lafargue said.

Back home, data showed higher-than-expected German January industrial output, raising hopes the economy is finally bottoming out after a lengthy manufacturing recession, while the largest economy in Europe saw January producer prices fall less than expected.

On the policy front, Reuters reported European Central Bank policymakers overwhelmingly back June for a first rate cut and some have informally floated the idea of a further move in July. Providing some relief were German, French, Finnish and Lithuanian central bank governors talking up chances of the ECB lowering rates, firming up a hint dropped by President Christine Lagarde on Thursday.

“We need to understand what may drive a rate cut — if European growth is holding up and inflation is coming down or because the economy is slowing more rapidly than anticipated,” Lafargue said.

Among other movers, the financial services index climbed 1.1%, buoyed by a 4% jump in UBS. Morgan Stanley upgraded the largest Swiss bank to “overweight” from “equal-weight”, while a report showed UBS will close 85 Swiss branches of its combined operations with Credit Suisse by 2025.

Spanish drugmaker Grifols soared 19.7% after auditor KPMG approved its 2023 results with an unqualified opinion, while French liquid products distributor Rubis climbed 7.2% following better-than-expected annual results. German meal-kit maker HelloFresh tanked 42.1% after 2024 core earnings forecast missed expectations significantly.

European stock markets climbed at the open on Monday following a mixed start to the week in Asia.

London’s benchmark FTSE 100 index gained 0.3 percent to 7,341.83 points. In the eurozone, Frankfurt’s DAX index won 0.6 percent to 14,306.59 points and the Paris CAC 40 advanced 0.3 percent to 6,616.54.

UK shares dipped on Friday ahead of key US jobs data that could help shape investor expectations on interest rate cuts globally, while British packaging firm DS Smith gained on a buyout offer from bigger rival Mondi.

The mid-cap FTSE 250 lost 0.2% after rising to a threemonth high in the previous session. Markets now await the crucial US jobs report, due later in the day, after signals from major central bank officials this week underscored hopes of monetary policy easing this year.

“If jobs are not growing and unemployment rate remains the same, it would suggest the US job market is not necessarily growing, potentially pointing towards further encouragement for that rate cut,” said Christopher Peters, a trading floor manager at Accendo Markets.

Peters added that Federal Reserve Chair Jerome Powell’s remarks to the US Senate were the strongest hint yet that monetary policy could ease in the coming months.

Shares of DS Smith climbed nearly 7%, to lead gains on the benchmark, after Mondi reached an agreement in principle for an all-share offer to buy the company for 5.14 billion pounds ($6.57 billion).