MW: European stocks advance, but weekly losses still in sight
European equities pushed slightly higher Friday, finding support as investors assessed corporate earnings, but the market remained on course for its first weekly decline in three.
The Stoxx Europe 600 SXXP, +0.16% was higher by 0.4% to 399.80. The pan-European index was still on track for a 1.5% weekly loss.
France’s CAC 40 PX1, +0.37% rose 0.6% to 5,116.99, and Germany’s DAX 30 DAX, +0.03% gained 0.1% at 11,528.07. Spain’s IBEX 35 IBEX, -0.37% was flat at 11,444.70, and the U.K.’s FTSE 100 UKX, +0.14% picked up 0.3% at 6,674.53. But each of those indexes were facing weekly declines, as well.
The mining group SXPP, -0.10% on the Stoxx 600 was the only sector in the red early Friday, after a preliminary reading of Chinese manufacturing activity in July sank to a 15-month low. Mining companies are sensitive to China’s economic performance as the country is a major buyer of natural resources and related products.
Among mining decliners, Antofagasta PLC ANTO, -1.67% fell 1.6% and Polyus Gold International Ltd. PGIL, -1.16% lost 1.4%.
For the week, markets are likely to be “vulnerable to downside pressures, with sentiment under threat following the return of weak data from China overnight and as the resumed selling in commodities weighs on investor confidence,” said Jameel Ahmad, chief market analyst at FXTM, in a note.
Economic data: Investors on Friday received slightly weaker-than-expected readings in eurozone manufacturing and services data. Markit’s July flash eurozone purchasing manufacturing index hit a two-month low at 52.2. Expectations were for a 52.5 reading, according to Dow Jones Newswires.
“Markets [are] looking through weak German and French PMI data, happy to see the Eurozone region wasn’t too impacted,” Mike van Dulken, Head of Research at Accendo Markets, said in a note.
Corporates: Thales SA HO, +10.36% shares jumped 7.6%, topping the Stoxx 600, after the French defense company backed its full-year forecast and posted a better-than-expected first-half profit.
Vodafone VOD, +3.91% shares rose 3.8% as the mobile-phone operator said it sees continued recovery in its key markets in Europe.
Aggreko PLC AGK, -13.71% shares tumbled 14% as the temporary power provider said earnings will fall short of expectations this year.
Greece: The debt-burdened country and its creditors are slated to meet Friday to begin talks aimed at moving Greece toward receiving a third bailout deal. But challenges remain, with the International Monetary Fund putting pressure on Europe to sign up to a detailed debt-restructuring plan for Athens. Read: Greek bailout talks ready to start
