The week could have gone a lot worse for equities

Paris (AFP) - European stock markets pushed higher on Friday as investors were happy to have emerged largely unscathed from a week full of pitfalls, especially on Brexit.

But even as they picked up stock bargains, players also looked across the Atlantic where major banks are to kick off their first-quarter earnings season, including JP Morgan and Wells Fargo.

The outlook for financials’ earnings “is not that great”, said Jasper Lawler, an analyst at London Capital Group.

He predicted, however, that analysts would be looking past the quarter to gauge what the future holds.

Forward guidance “is the information that will tell us whether Q1 negative earnings are just a bump in the road, or whether this is the start of a far more sinister trend”, he said.

Still, cautioned Lukman Otunuga, a research analyst at FXTM, “should earnings from both banks disappoint, risk sentiment for global equities may take a hit”.

In the meantime, investors basked in relief that Britain and the European Union kicked the Brexit can down the road for another six months, and that statements from both the European Central Bank and the US Federal Reserve, while cautious, contained little that was new or frightening.

- In the end, an ‘unremarkable’ week -

In contrast to what punters had predicted a week ago “it’s been an unremarkable week for global equity markets, despite an ECB rate meeting, an EU summit and Fed minutes,” said Michael Hewson at CMC Markets.

Supporting sentiment were eurozone industrial production data for February that analysts at Capital Economics “suggest that output in the sector performed a little better in Q1 than at the end of last year” although was likely to be sluggish going forward as global economic growth weakens.

Earlier, Asian markets ended mixed.

Analysts in the region reported that with few fresh developments on the China-US trade talks, a rally that characterised the first three months of the year appeared to be running out of steam, while Donald Trump’s threats of tariffs against Europe jolted confidence.

Data Friday showed China’s imports falling more than expected in March, signalling ongoing fragility in the world’s number two economy, even as exports enjoyed a sharp rise.

Total imports sank 7.6 percent on-year last month while exports rose 14.2 percent, the data from China’s customs administration showed.

Economists polled by Bloomberg had expected a slight 0.2 percent rise in imports with exports projected to grow 6.5 percent.

The readings come after a run of positive releases from Beijing including forecast-beating factory activity and a jump in inflation in the world’s second largest economy.

“Recent improvements in China activity data… expectations of further feed-through from policy stimulus to the real economy and signs of some partial form of US-China trade truce have all given rise to a more bullish China sentiment,” said Jasslyn Yeo, global market strategist at JP Morgan Asset Management.

In commodities, oil prices chalked up more gains in a six-month bull run that analysts said is their best streak since 2016.

- Key figures around 1010 GMT -

London - FTSE 100: UP 0.4 percent at 7,448.32 points

Frankfurt - DAX 30: UP 0.5 percent at 11,997.02

Paris - CAC 40: UP 0.3 percent at 5,502.30

EURO STOXX 50: UP 0.4 percent at 3,444.64

Tokyo - Nikkei 225: UP 0.7 percent at 21,870.56 (close)

Hong Kong - Hang Seng: UP 0.2 percent at 29,771.14 (close)

Shanghai - Composite: FLAT at 3,188.63 (close)

New York - Dow: DOWN 0.1 percent at 26,143.05 (close)

Pound/dollar: UP at $1.3079 from $1.3058 at 2100 GMT

Euro/pound: UP at 86.53 pence from 86.20 pence

Euro/dollar: UP at $1.1317 from $1.1253

Dollar/yen: UP at 111.94 yen from 111.66 yen

Oil - West Texas Intermediate: UP 87 cents at $64.45 per barrel

Oil - Brent Crude: UP 74 cents at $71.75 per barrel