By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Upbeat growth data from China and a
strong prior-day session on Wall Street helped lift European stock
markets on Friday, with the benchmark index on track for a seventh
straight day in positive territory.
The Stoxx Europe 600 index climbed 0.6% to 317.93, flirting with
the highest level in more than five years.
On the week, the benchmark was looking at a 2% gain, even after
a period of uncertainty about the U.S. government shutdown and debt
ceiling. Read: Obama says there are no winners from fiscal
battle
"Now that we have the U.S. out of the way, markets will focus on
two very important issues. First, that the world-wide economy is
improving, which was evidenced overnight with Chinese GDP data. And
second, that the big flow of money is very good and money is still
flowing into equities. I am fairly optimistic going into 2014 that
markets will remain well supported," said Philippe Gijsels, head of
research at BNP Paribas Fortis Global Markets.
"We saw the German election went well, tapering [in the U.S.]
has likely been put off until the of the year or the beginning of
2014, we will still have discussions in Washington, but at least
postponed until the beginning of next year, earnings are decent and
economic figures," added. "We're telling clients to buy equities
right now."
Among notable movers on Friday, shares of L'Oréal SA gained 3.3%
after Shiseido Co. said it has entered exclusive talks to sell two
of its Paris-based cosmetics businesses to the bigger French
rival.
Shares of Anglo American PLC fell 1.2% after the miner released
a mixed production update for the third quarter with copper,
diamond and nickel output up, but iron ore down.
OMV AG dropped 2.1% after the oil refiner said political unrest
in North Africa took its toll on hydrocarbon-production levels in
the third quarter.
China growth
For the broader European markets, investors were inspired by
news from China, where data showed the economy expanded 7.8% in the
third quarter. The reading was higher than some analyst estimates,
but in line with average expectations from a Reuters survey of
economists.
However, statistics for September suggest a mild slowdown is
under way, with growth for industrial production, retail sales and
construction activity all slipping. "While one should always be a
bit skeptical about Chinese growth data, the current picture is
supported by a rise in industrial production as well as development
in electricity production. Interestingly, the current activity data
are stronger than the PMIs suggest," analysts at Danske Bank said
in a note.
"This is not the first time this has happened, though, and it
may indicate some upside risk to PMI in coming months. We look for
growth to keep a robust pace in coming quarters but to lose steam
during 2014," they added.
Analysts at Nomura were more bearish on the Chinese growth story
and said they expect GDP growth to slow to 7.5% year-on-year in the
fourth quarter and 6.9% in 2014.
In the U.S., the S&P 500 index (SPX) managed a record finish
on Thursday as Wall Street turned from the latest fiscal drama on
Capitol Hill to corporate earnings.
U.S. stocks traded mixed on Friday, but with the S&P
extending its record.
In Europe, Germany's DAX 30 index added 0.3% to 8,841.67.
France's CAC 40 index picked up 0.9% to 4,276.93, while the U.K.'s
FTSE 100 index rose 0.6% to 6,615.18.
Outside the major indexes, shares of Svenska Cellulosa AB jumped
6.4% after the paper and hygiene-products producer reported a rise
in third-quarter profits and beat expectations.
Yara International ASA added 4.3% after the Norwegian firm said
fertilizer deliveries were up 17% in the third quarter due to
higher sales in Brazil.
Schindler Holding Ltd. climbed 4.5% after announcing a
share-buyback program.
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