European Stocks Near One-Month High, Set for Third Weekly Gains
European stocks hovered near a one-month high, set for a third weekly advance, on growing optimism that the global economy can withstand higher U.S. borrowing costs.
The Stoxx Europe 600 Index slipped 0.2 percent at 9:59 a.m. in London, taking its advance to 3 percent for the week. The number of shares on the gauge changing hands was 37 percent lower than the 30-day average, before holidays in the U.K. and U.S. on Monday.
European shares have resumed a rally that stalled after a 16 percent rebound from a February low. After hawkish comments from Federal Reserve officials, traders increased the chances of an interest-rate increase in June to 28 percent and to more than 50 percent for July. Fed Chair Janet Yellen is due to speak on Friday after the close of European markets.
“Today certainly all investors’ eyes will be on Yellen,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf, Germany. “The Fed is obviously willing to increase rates. But it is more a risk than a chance for stocks. I was surprised with the recent strength.”
Zimmermann said for the gains to continue, economic data need to improve.
The region’s benchmark gauge is posting its longest streak of weekly gains since March and closed on Thursday 0.5 percent away from its April 20 high. On Friday, steelmaker Voestalpine AG climbed 3.4 percent after Berenberg wrote in a note that the company is benefiting from strength in the auto industry. Roche Holding AG led gains among health-care companies, up 3.5 percent, after its Genentech unit reported positive drug results.
SES SA slumped 14 percent after a stock offering. Banco Popular Espanol SA fell for a second day, extending a record low, after its biggest slump since 1999 following a share sale.
Source: Bloomberg
