Economic news

Slide in Pharma Stocks Keeps Europe Below Record Highs

(Reuters) -European shares hovered just below record highs on Friday as a slide in healthcare-related stocks more than offset a boost from the financial sector, although Credit Suisse rose after a Reuters report that it was considering a potential merger with UBS.

The scandal-hit Swiss bank was up 2.1% as the report said Credit Suisse’s management was under pressure to come up with an overhaul plan. UBS shares were up 0.1%.

The pan-European STOXX 600 was flat by 0755 GMT, but was set to end the week modestly higher following sharp swings on concerns of higher inflation hitting real income and leading central banks to raise interest rates sooner than expected.

With the U.S. Federal Reserve sending out mixed messages this week on how hot it would let inflation run, all eyes on Friday will be on the U.S. core personal consumption expenditures (PCE) report, the central bank’s preferred inflation measure.

“Today’s May number is not expected to be immune to the continued move higher in prices and further increases in the PCE deflator could well reignite market concerns about a less than transitory inflation environment,” said Michael Hewson, chief market analyst at CMC Markets UK.

The STOXX 600 fell sharply from record highs last week after a surprisingly hawkish tone from Fed officials roiled global financial markets. [MKTS/GLOB]

The European Central Bank has reiterated that it was too soon to taper monetary policy in Europe, while on Thursday, the Bank of England struck a dovish tone to policy even as it acknowledged inflation would surpass its 2% target.

London’s FTSE 100 was among the rare gainers in Europe on Friday. [.L]

The European banking index rose 0.1% and was set to end the week with gains of about 1.7% as investors returned to economically sensitive sectors. Other so-called value stocks including miners and energy were also among the top gainers on the week.

Construction-related stocks added 0.6% following a jump in the U.S. infrastructure sector as U.S. President Joe Biden embraced a bipartisan Senate infrastructure deal.

German stocks fell 0.1% even as a report showed consumer sentiment improved more than expected heading into July.

British subprime lender Amigo Holdings surged 11.7% after saying it had secured a three-month extension to a funding line as it scrambles to secure its future after a court rejected a rescue plan for the firm last month.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Shounak Dasgupta

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree