PARIS: European shares rose on Friday to end the week higher, while German stocks lagged as SAP’s bleak revenue forecast weighed on the tech sector, which also recorded its biggest weekly drop this year.
SAP fell 4.2% after the business software maker trimmed its full-year outlook for key cloud sales, dragging Germany’s DAX index down 0.2%.
The pan-European STOXX 600 index edged 0.3% higher, rising for the fourth straight session.
Europe’s technology sector, which fell 4.8% to be top decliner among major sectors this week, slipped 0.4% on the day.
The mining sector declined 1.5%, hurt by some disappointing results.
Swedish steelmaker SSAB slumped 13.8% to the bottom of the STOXX 600 after its operating profit halved in the second quarter, while Norsk Hydro fell 2.2% after the Norwegian aluminium producer raised its capital expenditure guidance.
The STOXX 600 rose 0.9% for the week, largely driven by a rally in British shares following evidence of slowing domestic inflation. But concerns about China’s weak economic recovery and weakness in the technology sector amid the earnings season capped gains.
The UK’s FTSE 100 posted 3% gains this week, its best in nearly four months.
Investors are now focussed on another round of major central bank policy meetings next week for more clues on the global interest rate trajectory.
Deutsche Bank said it expected the European Central Bank to hike the deposit rate by 25 basis points to 3.75% on July 27, but added that a further hike in September cannot be ruled out given the ECB’s commitment to bringing inflation under control.
“Focus is on full calendar and rate decisions next week,” said Axel Rudolph, senior market analyst at IG.
“Rate decisions by the Fed, ECB and BoJ next week alongside flash PMIs, consumer sentiment, GDP and inflation data will likely add some volatility to the mix.”
Thales slipped 4.8% despite a guidance raise by the defence electronics firm, with Jefferies pointing to revised forex assumptions weighing on the outlook.
Ubisoft jumped 5.2%, after the French video game producer’s first-quarter net bookings came above guidance.
Lonza slid 11.1% after the Swiss contract drug manufacturer cut its full-year outlook.
SBB tumbled 12.9% after the Swedish property group and Brookfield ended talks on the sale of SBB’s remaining 51% stake in its education subsidiary EduCo.
Comments
Comments are closed for this article.