European and US stocks were pushing higher Friday
London (AFP) - European equities mostly advanced Friday, despite a gloomy survey which confirmed the coronavirus-hit eurozone was in recession, while US stocks rebounded.
Oil prices sank as some companies began slowly restarting operations in the US producer state of Texas, where refineries have been hammered by a cold snap.
Bitcoin zoomed to a new peak at $52,917, extending this month’s record-breaking run as several big-name corporations embrace the world’s most popular cryptocurrency.
Meanwhile, the eurozone’s economy is being hit hard by a new wave of lockdowns but the damage will be less severe than last year’s virus-induced crash, a key survey showed.
The closely watched PMI index compiled by IHS Markit rose to 48.1 points in February from 47.8 points in January, closer to the 50-point level which would have indicated growth.
However, businesses also expressed confidence that vaccinations would allow economic activity to rebound in the coming months, IHS Markit added.
- ‘Seen as a positive’ -
Markets shrugged off the data because a recession was already expected owing to Covid-19 restrictions, according to CMC Markets analyst David Madden.
“The eurozone (economy) contracted by 0.7 percent in the fourth quarter – and the first quarter is expected to be even worse on account of (coronavirus) restrictions, so a recession is priced in,” Madden told AFP.
“At the moment – if things do not get any worse – that is seen as a positive.”
In afternoon deals, the Frankfurt stock market won 0.9 percent and Paris added 0.7 percent, as investors digested upbeat German and French manufacturing figures.
“The PMIs made for interesting reading (but) Germany’s manufacturing sector is powering ahead – with the fastest expansion rate in three years,” Madden noted.
- Sterling tops $1.40 -
In Britain, London stocks stayed in positive territory even though the pound rose above $1.40 for the first time in almost three years and retail sales dropped sharply in January as the country entered another lockdown.
Sterling breached the symbolic level for the first time since April 2018, reaching $1.4012.
The currency was propelled by a vaccination drive that has boosted economic recovery hopes and eclipsed news of a lockdown-driven slump in retail sales, dealers said.
A strong pound nonetheless weighs on share prices of London-listed multinationals that earn in dollars.
The latest UK PMI came in at 49.8, close to the benchmark 50- point level, and was a major improvement from January’s reading of 41.2, which analysts took as a sign the British economy was stabilising.
Wall Street opened higher, with the Dow adding 0.2 percent.
US stocks have edged upwards to set new record highs this week, but investor concerns about inflation risks have held back any rally.
Asian equities meanwhile diverged Friday as the region mulled concerns that a longer-term global economic recovery could fuel inflation.
- Key figures around 1430 GMT -
London - FTSE 100: UP 0.3 percent at 6,633.80 points
Frankfurt - DAX 30: UP 0.9 percent at 14,009.19
Paris - CAC 40: UP 0.7 percent at 5,768.73
EURO STOXX 50: UP 0.8 percent at 3,711.79
New York - Dow: UP 0.2 percent at 31,552.00
Tokyo - Nikkei 225: DOWN 0.7 percent at 30,017.92 (close)
Hong Kong - Hang Seng: UP 0.2 percent at 30,644.73 (close)
Shanghai - Composite: UP 0.6 percent at 3,696.17 (close)
Euro/dollar: UP at $1.2124 from $1.2092 at 2200 GMT
Pound/dollar: UP at $1.4012 from $1.3975
Euro/pound: DOWN at 86.51 pence from 86.53 pence
Dollar/yen: DOWN at 105.52 yen from 105.69 yen
Brent North Sea crude: DOWN 0.6 percent at $63.58 per barrel
West Texas Intermediate: DOWN 0.8 percent at $60.01