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Thursday, October 28, 2021
Stocks & Shares

European stocks cautiously higher

DAX

The DAX gained 0.4%, the CAC 40 rose 0.3%, while FTSE MIB advanced 0.17%

European stock markets pushed cautiously higher on Friday morning, adding to the previous bullish session which saw them hit a ten-month high and Wall Street reach another record close.

Major markets across Europe dipped slightly at the open but turned positive as the morning progressed. After hitting a post-pandemic high on Thursday, the DAX rose 0.4% on Friday morning while the CAC 40 climbed 0.3% in France.

Spain’s IBEX 35 fell 0.2% but Italy’s FTSE MIB gained 0.17%.

The best performer was the FTSE 100 in London, which was boosted by weakness in the pound  on the back of negative Brexit sentiment. The EU’s chief negotiator Michel Barnier said the UK and the EU have ‘just a few hours’ to work out an agreement which knocked the currency against the euro and the dollar, falling from its two-year high yesterday.

This is a positive for the blue-chip index thanks to the inverse relationship between sterling denominated share prices and the dollar-based earnings of many of the index’s constituents.

Retail sales data published on Friday morning in the UK showed spending declined for the first time in six months in November. The slump coincided with a month long lockdown across England.

Richard Hunter, head of markets at Interactive Investor, said: The FTSE100 has not been able to build on the momentum of a strong showing since the beginning of November and remains down by 13% in the year to date.

He said that the overarching concerns around Brexit and the pandemic continue to cast a shadow on sentiment, while the very nature of the index itself has also stunted progress, with an exposure to the likes of the oil and banking sectors in particular proving a headwind during the course of the year.

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