Europe open: Stocks recover on weaker euro and optimism around Eurozone data
Equity markets in Europe rebounded on Friday, as a weaker euro currency helped boost the shares of exporting companies, though concerns remained about geopolitical drama in the Middle East.
At 0930 GMT, the DAX in Germany, CAC-40 in France and IBEX-35 in Spain were up 0.3%, 0.4% and 0.2%, respectively. UK’s FTSE 100 index underperformed European peers, down 0.1%, albeit recovering from previous session lows.
The pan-European Stoxx 600 index added 0.6% to trade at 397.
Eurozone share markets were helped by the euro dropping 0.7% against the US dollar to trade around $1.08, which is welcome news for exporting blue-chips based in Europe. The Stoxx 600 automobiles and parts index – a strong gauge of exporting companies - rose 0.8%.
There was little in the way of Eurozone economic data but sentiment continued to be lifted by Thursday’s better than forecast Spanish GDP, French deficit and Eurozone M3 data. “Economic data released over the month have confirmed that the recovery is gaining traction, supported by lower oil prices, a weaker euro and ECB policy action,” said Barclays.
Geopolitical tensions were still in the backdrop with concerns that the Yemen conflict could close the Bab-el-Mandeb strait, a key shipping route for oil tankers located between Yemen and Djibouti. But, oil prices eased off previous session highs as analysts dismissed a prolonged unrest.
Brent crude, the global proxy benchmark, was down 1.2% to $57.73 a barrel, while WTI Crude was off 1.4% to $50.41 a barrel.
Naturally, airline stocks - with their heavy exposure to oil - were the major outperformers after the sector sold off heavily on Thursday as the oil price rose. The Stoxx 600 travel and leisure index rose 0.6%.
Attention turns to Federal Reserve chair Janet Yellen's speech on Friday and the release of US gross domestic product for the first quarter.
In company news, shares in Denmark's Novo Nordisk rose 13% after the pharmaceutical firm decided to submit interim analysis data from a clinical trial of its crucial new insulin drug Tresiba to US regulators within the next month.