Europe close: Stocks end week on the front foot
European stocks were flat and government bond yields lower in quiet trade after Thursday’s session saw investors react to rate announcements from the Federal Reserve and the Bank of England.
The benchmark Stoxx Europe 600 index gained 0.34% to 360.02 while Germany’s DAX gained 0.33% and France's Cac 40 was up 0.29%.
Mimicking the Dax's rise back into positive territory for the year earlier in the week, Spain's Ibex 35 moved to within a whisker of being back in black for 2016.
In parallel, the yield on the benchmark 10-year Bund was lower by five basis points at 0.31% while euro/dollar was gaining 0.29% to stand at 1.0450.
Meanwhile, oil prices nudged higher, with Brent crude up 2.2% to $55.20, helped along by Goldman Sachs's decision to revise its 2017 price forecast up to $57.0 a barrel from $54.0 beforehand.
However, the resulting supply response and the likelihood that low-cost non-OPEC producers would ramp up production volumes meant the price was now seen lower in 2018, at $58.0 per barrel instead of $63.0, Goldman added.
"Seems the mid-week dip on a more hawkish Federal Reserve was just a chance for a breather. The US economy is fit enough to absorb a number of rate hikes next year and, like Brexit, Trump and Italy before it, Fed tightening is no reason to sell. Traders are not minded to bet against president-elect Donald Trump just yet either.
"The last potential banana skin this side of Christmas has finally been cleared, and there really is very little to stop equity markets going higher. The FTSE 100 is already well set for its first close above 7,000 for over seven weeks, and with volumes thinning and year-end portfolio housekeeping underway, risk is to the upside," said Lee Wild, head of Equity Strategy at Interactive Investor.
In corporate news, Swiss biotech group Actelion rallied following a report that France’s Sanofi is in advanced talks to acquire the company, in a deal that could be announced as early as next week.
Rentokil Initial surged after the FTSE 250 pest control company said it has agreed to merge its Workwear and Hygiene divisions with Germany's Haniel & Cie Holding Co.
On the downside, Micro Focus International slumped after UBS cut its rating on the stock to ‘neutral’ from ‘buy’ citing near-term risks.
Consumer prices in the euro area dipped by 0.1% month-on-month in November, while the annual rate of price gains accelerated from 0.5% to 0.6%, Eurostat said.
Core prices fell 0.2% over the month, but were up 0.8% on the year, unchanged from October.
The single currency area's trade surplus slipped from €24.4bn in September to €19.7bn for October, Eurostat said in a separate release.