European stocks end busy week with gains

European shares rose sharply on Friday, staying in positive territory for the week, as investors began to moderate bets on monetary tightening by major central banks, spurring flows into risky assets.

The pan-European STOXX 600 index closed up 2.62% at 412.93 points, marking its best session in more than three months. The day before, it had hit a new 2022 low as weaker-than-expected eurozone business activity data weighed on sentiment.

The STOXX 600, which until Thursday was in the red for the week, recorded a gain of 2.4% compared to last Friday’s close, breaking a sequence of three weeks of losses.

Healthcare, banking and technology stocks led broad gains on the day. The retail sector, which fell nearly 3% in the session to the lowest levels since March 2020, erased those losses and ended up 1.9%, marking its best day in more than three months.

“Talks of a recession have increased significantly and hurt commodity prices and caused bonds to rally. It certainly helped the equity markets,” said Roger Jones, head of equity at asset manager London & Capital.

Trading has been volatile in recent days as investors fear rising interest rates and rising inflation will drastically harm corporate profits and economic growth.

This has caused traders to lower their bets on how far central banks will be able to raise interest rates this cycle.

• In London, the Financial Times index advanced 2.68%, to 7,208.81 points;
• In Frankfurt, the DAX index rose 1.59% to 13,118.13 points;
• In Paris, the CAC-40 index gained 3.23%, at 6,073.35 points;
• In Milan, the Ftse/Mib index appreciated by 2.33%, at 22,119.20 points;
• In Madrid, the Ibex-35 index registered an increase of 1.70%, to 8,244.10 points;
• In Lisbon, the PSI20 index rose by 1.84%, to 6,030.46 points.