European stocks continue winning streak despite US slowdown

EUROPEAN bourses largely held on to gains yesterday despite data showing that the US economy slowed in the first quarter as consumer spending grew at its slowest pace in nearly five years.

But the setback is probably temporary, with a backdrop of a tightening labour market and large fiscal stimulus.

US gross domestic product increased at a 2.3pc rate, the Commerce Department said in its snapshot of first-quarter GDP.

The economy was also held back by a moderation in business spending on equipment and investment in homebuilding.

The economy grew at a 2.9pc pace in the fourth quarter.

Economists polled by Reuters had forecast output rising at a 2.0pc rate in the January-March period.

Well-received results from Spanish banks and a recovery among tech stocks buoyed European shares in early trading yesterday, setting them up for their fifth week of gains in a row.

The pan-European STOXX 600 index was up 0.1pc near the end of the session and on track for its longest winning streak in terms of weekly gains since last September.

Ireland’s ISEQ Overall Index failed to move into positive territory, however.

It slipped 0.21pc to 6,795.99. Decliners included Glenveagh Properties, which was down 2.4pc at €1.13. Financial services group IFG swung during the day, adding and losing as much as 3pc. It closed flat at €1.60. The UK’s FTSE-100 rose 1.1pc. Germany’s DAX was 0.6pc higher and France’s CAC-40 was up 0.5pc.

Britain’s RBS, the owner of Ulster Bank, was a laggard, reversing early gains to close almost 1.5pc lower after a concerns over a pending fine from the US Department of Justice eclipsed its first-quarter update.