European stock markets followed the global positive trend Friday, extending the previous session’s gains as investors take stock following the slew of economic data published this week.
The pan-European Stoxx 600 index was up 0.9% at market close, as auto stocks added 3.6% and mining stocks gained 2.2%. Oil and gas stocks were among the few sectors to post losses, down 0.4%.
Volkswagen led auto gains with shares up over 11.2% during afternoon deals after the carmaker posted a better-than-expected outlook for 2023.
Across Europe, inflation data came in hotter than expected. A flash estimate for the euro zone showed headline inflation eased from 8.6% to 8.5%, but this was above a consensus estimate; while core inflation rose from 5.3% to 5.6%.
Price rises unexpectedly accelerated in Germany, France and Spain.
European Central Bank President Christine Lagarde said Thursday that getting inflation to its 2% target will still take time and that the previously signaled 50 basis point hike in March is still on the cards, Reuters reported.
The euro zone manufacturing PMI out this week showed a fall on the previous month, though S&P Global said it was pulled down by stocks of purchases and that production volumes across the bloc had broadly stabilized.
Global markets were given a boost Thursday by comments from Atlanta Federal Reserve President Raphael Bostic, who said he was “firmly in favor” of quarter-point hikes and that the U.S. central bank should go “slow and steady.” The Dow had its best day since Feb. 13 as risk-on assets climbed.
However, in a separate speech, Fed Governor Christopher J. Waller raised the possibility of a higher terminal rate if inflation does not cool, citing January’s bumper payrolls report.
A positive signal for the global economy came on Wednesday, when China’s National Bureau of Statistics reported its official manufacturing purchasing managers’ index rose to 52.6 in February, the highest since April 2012. Another survey showed services activity accelerated at its fastest pace in six months.
Asia-Pacific markets were mostly higher Friday, while U.S. equity markets also opened higher.
