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Global Markets Weekly Update - Europe

5af16d379a24f
BM.GE
08.05.18 13:23
617
Key European equity indexes ended higher for the holiday-shortened week, helped by positive corporate earnings reports, a
strong U.S. jobs data report and a weaker euro, which aids companies that export goods.

International traders noted that investors largely ignored some weak economic data, including disappointing retail sales
metrics, the pan-European STOXX 600 Index logged a 0.6% gain for the week with mining and technology stocks posting notable
gains. (On May 1, stock markets were closed across most of Europe, including Germany, France, Spain, and Italy, in observance
of May Day.)

Italian stocks outperformed most of their peers in Europe, the benchmark Italian index FTSE MIB climbed to its highest level
since 2009, according to FactSet data. Credit Analyst observes that monetary easing implemented by the European Central Bank
(ECB) helped lower Italy’s interest rates and made Italian equities more attractive to investors.

Italy’s improved economic growth coupled with banks offloading more of their nonperforming loans is a key reason for the
improvement in business confidence. Politics are still a concern with a government still not formed two months after the Italian
election.

UK economic growth slows, IHS Markit’s UK purchasing mangers’ index (PMI) readings for the services, manufacturing and
construction sectors all came in under expectations during the week, sending strong signals that the rebound in business activity
is starting to soften.

Bond yields tumble, Eurozone government bond yields fell at the end of the week after annual inflation slowed to 1.2% in April,
according to the Eurostat flash estimate down from the 1.3% March level.

Chief International Economist notes that economic data throughout Europe is mixed, they believe that while economic growth
in Europe is slowing, it is doing so only moderately.


Source : Galt & Taggart