Europe close: Strong miners offset weak periphery
European equity markets were mixed on Friday as the Greek debt crisis weighed on investors' minds, although miners were boosted following encouraging Chinese trade figures.
The benchmark Stoxx Europe 600 index was 0.16% higher at the end of trading to 367.39, Germany’s DAX was up 0.21% to 11,666.97 and France’s CAC 40 edged higher 0.04% to 4,828.32.
Meanwhile, oil prices ticked higher, with West Texas Intermediate up 1.99% at $54.07 a barrel and Brent crude ahead by 2.1% at $56.81.
Investors were keeping a closer eye on developments in Greece. Analysts at Monex Europe said: “The Greek debt crisis was once again in headlines, with spreads between Greek sovereign debt and other Eurozone countries once again showing investor caution. German Finance Minister Wolfgang Schäuble reiterated previous statements calling for Greece to reform or leave the Eurozone.
“Reports circulated that Greece’s creditors would prepare a new series of proposed austerity measures for presentation today, meaning the 20 February meeting of Eurozone finance ministers could see a possible resolution, or escalation, of this latest stage in the ongoing drama.”
Those reports drove the yield on the two-year Greek government bond to 8.59% on Friday from the 10.06% level where it was trading at by end of play on Thursday.
Elsewhere, mining stocks got a lift after data released earlier showed Chinese exports rose 7.9% in January in dollar terms, marking the fastest pace in almost two years, while imports rose 16.7%. Both sets of figures beat economists’ expectations.
Basic resources were the standout gainers, with the Stoxx 600 sub-index for the sector up 3.69% as copper prices were boosted by supply concerns after the Chinese trade data suggested a strong demand outlook for the metal.
Results from steel giant ArcelorMittal also underpinned gains in the sector, as it said 2016 earnings rose to $6.3bn from $5.2bn the previous year. Shares in the Luxembourg-based miner rose 9.34%.
French car maker Renault gained 1.02% after it said profit jumped 38% in 2016, while Reckitt Benckiser fell 3.60% as it confirmed that it would buy US infant formula-maker Mead Johnson for $16.6bn.
Luxury brand Kering rose 3.85% after its 2016 profit beat analysts’ forecasts, but Belgian car parts maker Umicore sank 5.51% as it posted a mere 1% increase in full-year revenue.
Commerzbank fell 2.13% after S&P Equity Research downgraded the German bank to ‘strong sell’ from ‘hold’.
On the data front, Italy’s annual industrial production, which accounts for little under a third of the country’s GDP, grew at its fastest pace since 2010 as overall output rose 1.6% in 2016.
Meanwhile, France’s industrial output, which accounts for under a quarter of the country's GDP, dropped 0.9% in December from 2.2% a month earlier. This was more than the 0.7% fall expected. It grew in November on an annual basis with a 1.8% rise, compared to a 1.8% decline in October.