European Stocks Close Higher On Encouraging China Data, ECB's Rate Hike Comments

(RTTNews) - European stocks closed on a firm note on Friday, extending gains from the previous session, as the European Central Bank signaled that Thursday's rate hike could be the last hike in the current cycle.

Markets also reacted positively to Chinese retail sales and industrial production data. Industrial production posted an annual increase of 4.5%, while analysts expected output to climb moderately by 3.9% after a 3.7% increase in July.

Likewise, growth in retail sales improved to 4.6% in August from 2.5% in the previous month. This was also better than economists' forecast of 3%.

The pan European Stoxx 600 gained 0.23%. The U.K.'s FTSE 100 climbed 0.5%, Germany's DAX ended 0.56% up, and France's CAC 40 surged 0.96%, while Switzerland's SMI settled higher by 0.9%.

Among other markets in Europe, Belgium, Finland, Greece, Iceland, Norway, Poland, Russia and Sweden ended higher.

Austria, Denmark, Netherlands, Portugal and Turkiye closed weak, while Spain ended flat.

Shares of mining companies gained in strength thanks to the improved outlook for Chinese infrastructure building and industrial activity.

In the UK market, DCC, Flutter Entertainment, Burberry Group, Barratt Developments, 3i Group, Anglo American Plc, Kingfisher, GSK and Tesco gained 1.5 to 2.3%.

Prudential, Rio Tinto, Fresnillo, Glencore, Berkeley Holdings, AstraZeneca and J Sainsbury also ended notably higher.

Hikma Pharmaceuticals, BT, Segro, British Land Company, Land Securities, Pennon and Sage Group lost 1 to 1.6%.

In the German market, BASF, Brenntag, Porsche, Adidas, Siemens Healthineers, Sartorius, BMW and Fresenius gained 1.5 to 2.5%.

Vonovia ended about 2% down, and Infineon declined 1.2%.

In Paris, LVMH surged 2.5%. L'Oreal, Stellantis, Kering, Legrand, Michelin, ArcelorMittal, Hermes International and Capgemini ended higher by 1.3 to 2%.

Unibail Rodamco drifted down 4.6%. STMicroElectronics, Carrefour and Teleperformance lost 0.8 to 1%.

On the economic front, data from Eurostat showed the euro area trade surplus declined sharply in July as exports declined amid rising imports.

The trade surplus declined sharply to a seasonally adjusted EUR 2.9 billion from EUR 8.6 billion in the previous month. Exports decreased 1.7% from a month ago, while imports grew 0.7% in July.

On an unadjusted basis, the trade balance posted a surplus of EUR 6.5 billion compared to a deficit of EUR 36.3 billion in the same period last year.

France's consumer price inflation exceeded the initial estimate in August but harmonized inflation figure was confirmed, the statistical office INSEE reported on Friday. At 4.9%, consumer price inflation was higher than July's 4.3% and the provisional estimate of 4.8% for August.

Britons' long-term inflation expectations slowed in August but their confidence on the Bank of England deteriorated, according to the quarterly Inflation Attitudes Survey conducted by Ipsos on behalf of the BoE.

Inflation for the longer-term, say in the five-year time is seen at 2.9%, which was slower than the 3% estimated in May, the survey showed.

Meanwhile, respondents forecast one-year ahead inflation to come at 3.6%, up from 3.5% projected in the previous survey period.