By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets mostly posted
gains on Friday, with banks in the driver's seat, as bargain
hunters took advance of recent market slides to buy beaten-down
stocks ahead of the weekend.
The Stoxx Europe 600 index gained 0.5% to close at 285.21, after
ending Thursday's session unchanged.
The index, however, posted its biggest weekly drop since
November, down 2.5%, following disappointing macro economic data
from the U.S. and China, which stoked fears of a slowdown in the
global recovery. Further supporting the case for growth concerns,
the International Monetary Fund earlier in the week lowered the
global growth outlook to 3.3% in 2013, down 0.2 percentage points
from an earlier forecast. Growth outlooks for the U.S. and the euro
area were also downgraded.
"This was another case of the IMF reminding the market that the
growth outlook in developed markets is still very challenging and
we've seen it confirmed in the hard data in recent weeks. It has
led to a correction and headlines from this week just further moved
the market in that direction," said James Ashley, economist at RBC
Capital.
"Next week will be interesting with first-quarter GDP data from
the U.S. and the U.K. We also have flash PMIs for the euro zone
that are the first data sets of Q2 and will give us a sense if the
downturn continued. We expect to see a modest improvement," he
added.
With little data to move markets on Friday, the positive moves
came partly as investors were "looking for any excuse to buy into
equities after a rough-and-tumble week in the stock markets," said
Shavaz Dhalla, financial trader at Spreadex in a note.
Most Asia markets closed in positive territory, while U.S.
traded broadly higher.
Miners rally
Back in Europe, shares of Eurasian Natural Resources Corp.
soared 27%, after one of the miner's founding shareholders
Alexander Machkevitch said he is considering making a bid for the
company.
Shares of Kazakhmys PLC , which owns a 26% stake in ENRC,
rallied 24%.
Another miner, Anglo American PLC rose 2.2% in London, after the
firm said first-quarter output was higher across most commodities
including copper, iron ore and diamonds.
Other miners were also showing upbeat performances, with Vedanta
Resources PLC adding 6.1% and heavyweight Rio Tinto PLC . (RIO) up
1.5%. The mining sector was earlier in the week among major
decliners, hammered by slow-growth indications and a selloff in
gold and silver prices.
Metals prices were mixed on Friday.
The FTSE 100 index rose 0.7% to 6,286.59, breaking a five-day
losing streak, but shaving off 1.5% on the week.
Shares of heavyweight bank HSBC Holdings PLC (HBC) added
2.4%.
In Italy, banks were also on the rise. Shares of Banca Popolare
di Milano Scarl climbed 4.7%, Mediobanca Banca di Credito
Finanziario SpA gained 5.1% and UniCredit SpA rose 3.6%. The FTSE
MIB index rallied 1.8% to 15,760.78.
Italian politics were also on the spotlight, after the
parliament for a third time failed to elect a new president to
succeed President Giorgio Napolitano. The fourth round of voting,
where only a simple majority is needed, got under way Friday
afternoon according to media reports.
In Germany, Commerzbank AG dropped 2.2%, as the bank said it
expects to post a first-quarter loss due to already announced
expenses related to job cuts.
Software firm SAP AG dropped 3%, after reporting a 7% rise in
first-quarter revenue, below market expectations.
The DAX 30 index fell 0.2% to 7,459.96, extending losses into a
sixth straight day. On the week, the index erased 3.7%.
France's CAC 40 index picked up 1.5% to 3,651.96, but closed the
week 2.1% lower.
Shares of L'Oréal SA jumped 4.3%, after the beauty-products firm
late Thursday posted first-quarter sales ahead of analysts'
expectation and said it made a solid start to the year.
LVMH Moët Hennessy Louis Vuitton (LVMHF) rose 2.1%, after
Goldman Sachs added the luxury-goods firm to its conviction buy
list.
BNP Paribas SA rose 1.8% in Paris, while Société Générale SA
picked up 2%.
Outside the major indexes, shares of Spectris PLC sank 14%,
after the engineering firm lowered its revenue forecast for
2013.
The euro (EURUSD) rose to $1.31 on Friday, after Bundesbank
President Jens Weidmann said interest rates are currently
appropriate, according to a report in Bloomberg News.
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