LONDON — European markets were cautiously higher on Friday morning, tracking global counterparts as sentiment rebounded following a rocky week.
The pan-European Stoxx 600 edged 0.3% higher in early trade, but is still on track to end the week in the red. Household goods climbed 0.7% while telecoms stocks fell 0.6%.
Shares in Asia-Pacific climbed in Friday trade as Hong Kong-listed stocks affected by China’s regulatory crackdown bounced back, after potential further action from Beijing on gaming companies was revealed to not be as harsh as first reported.
Stateside, stock index futures were higher in early premarket trading on Friday after Wall Street notched a fourth consecutive day of losses on Thursday.
Weekly jobless claims figures on Thursday indicated that the U.S. labor market recovery remains on track, as the number of initial unemployment filings last week fell to 310,000, the lowest for nearly 18 months.
European investors continue to digest the European Central Bank’s decision on Thursday to slow down bond buying under its pandemic emergency purchase programme (PEPP) in response to higher inflation and stronger GDP growth across the euro zone. The ECB also modestly revised up its medium-term inflation forecasts.
“We counted at least four decisions which we will have to come back in December for, on top of the pace of PEPP for Q1 2022: the future of PEPP beyond March (wind down the programme or extend it, and what to do with the ‘normal’ QE programme APP), a possible new round of cheap loans to the banks (TLTROs) and possible technical adjustments to the asset purchase programmes to ensure it can last for longer,” said HSBC economists Simon Wells and Fabio Balboni.
“For now, the relatively dovish upward revision to the inflation forecast should reassure markets that more support is coming.”
In other news, finance ministers from the Group of Seven (G-7) major economies said Thursday that they need to make more technical progress on plans for global corporate tax reform.
Germany’s finance and justice ministries were raided on Thursday as prosecutors investigate the government’s anti-money laundering agency, casting doubt over failings to tackle financial crime in Europe’s largest economy.
On Friday, euro zone finance ministers will meet in Ljubljana, Slovenia, for informal talks.
On the data front, the U.K. economy rose just 0.1% in July, official statistics showed on Friday, as the spread of the delta variant of Covid-19 slowed economic activity to a trickle after the easing of lockdown measures.
The final German harmonized consumer price index (CPI) grew 0.1% month-on-month in August, marking a 3.4% annual increase.
There was little by way of major share price movement on Friday. Swedish property firm Samhällsbyggnadsbolaget climbed 3% after commencing construction of a new apartment project.
At the bottom of the Stoxx 600, Germany’s Fresenius Medical Care slid 3.2% after JPMorgan downgraded the…
Read More: Investors digest ECB slowdown, economic data