By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Europe's benchmark stock index posted a
third-straight week of gains on Friday, with Valeo SA rallying
after reporting earnings, and BAE Systems PLC and Rémy Cointreau SA
climbing after broker upgrades.
The Stoxx Europe 600 index added 0.4% to close at 336.09,
marking a 0.8% rise on the week. The three weeks in positive
territory was the longest weekly winning streak since November last
year.
The index broke a four-day winning run on Thursday after
disappointing Chinese manufacturing data stirred renewed concerns
about slowing growth in emerging markets. In January, China's
manufacturing purchasing managers index also missed expectations
and partly triggered a global market rout, where emerging-market
currencies were hit especially hard.
But despite the heightened uncertainty, analysts remained upbeat
on riskier assets, such as equities. Barclays said China is a risk,
but nothing worth hedging against at the moment. Instead, the main
worry remains the threat of eurozone deflation, the analysts
argued. Euro-zone inflation data are out next week and a weak
number is likely to trigger a wider discussion about further
monetary easing leading up to the European Central Bank's March
meeting.
In Friday's trade, shares of Valeo rallied 13% after the French
auto-parts maker said profit rose 18% in 2013.
Rémy Cointreau SA gained 1.2% after Barclays raised the
alcoholic-beverage maker to overweight from equal weight. The
analysts said it is the distiller most-geared toward China and will
benefit from "low penetration rates and attractive wealth
demographics" in the country.
Shares of BAE Systems (BAESY) added 2.7% after Société Générale
lifted the aerospace and defense firm to buy from hold. On
Thursday, the U.K. company dropped 8.3% after posting a fall in
2013 profit.
Bucking the positive trend, shares of Kering SA dropped 2.3% in
Paris after the Gucci owner posted a 95% decline in profit last
year amid signs of lower demand in China.
On a relatively quiet data day in Europe, U.K. retail sales were
the main focus on the numbers front. The Office for National
Statistics said sales fell 1.5% in January from the previous month,
but the institution cautioned that the drop came after a solid rise
in December sales. Year-over-year, January retail sales picked up
4.3%, and analysts stressed that the underlying strength of the
U.K. consumer spending is broadly intact. Another factor to keep in
mind is that the January data covered an extremely wet period with
serious floods in parts of the country.
In the afternoon, data from the U.S. showed existing-home sales
in January were the slowest in more than a year. But the weak
report was blamed on the exceptionally hard winter and didn't dent
sentiment on the U.S. stock markets where all major benchmarks
traded higher.
In Europe, France's CAC 40 index rose 0.6% to 4,381.06, ending
the week 0.9% higher. Germany's DAX 30 index climbed 0.4% to
9,656.95, trimming its weekly loss to 0.1%.
The U.K.'s FTSE 100 index gained 0.4% to 6,838.06 for a 2.6%
advance on the week.
Vodafone Group PLC (VOD) rose 3% in London after the
wireless-telecom firm said the deal to sell its 45% stake in
Verizon Wireless to Verizon Communications Inc. (VZ) was completed
on Friday. Traders said the deal is likely to significantly impact
trading patterns in coming weeks, with trading volumes on Friday
and Monday and Tuesday next week expected to be affected.
Vodafone on Wednesday said shareholders will receive 0.026
shares in Verizon Communications for each Vodafone share they
own.
Royal Bank of Scotland Group PLC (RBS) put on 1.2% after
Financial Times reported the bank will cut at least 30,000 jobs in
the coming years, mainly from its investment-banking activities and
international businesses. A representative from RBS declined to
comment on the report.
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