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Europe Markets: European stocks rise after strong PMI data, as a volatile week winds down

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European stocks rose on Friday, lifted by fresh data showing a sharp rise in business activity in the eurozone.

The Stoxx Europe 600 index
SXXP,
+0.62%

rose 0.4% to 443.79 and was indicating no change on the week. The German DAX
DAX,
+0.40%

rose 0.3%, the French CAC 40
PX1,
+0.67%

added 0.5%, and the FTSE 100
UKX,
-0.06%

fell 0.2%. The pound
GBPUSD,
+0.05%

rose against the dollar.

Investors were roiled by a day of selling on Wednesday, as cryptocurrency markets sold off. A rebound followed that on Thursday, and as volatility in those markets eased off.

U.S. stock futures
ES00,
+0.39%

YM00,
+0.43%

were rising following Thursday’s positive close that ended a three-session decline, boosted by upbeat data.

In Europe, the May flash IHS Markit purchasing managers composite output index for the region climbed to a 39-month high at 56.9, with the services index at a 35-month high. But the manufacturing PMI slipped to a two-month low at 62.8.

“Taken at face value, the PMI results and the separate strong bounce in U.K. April retail sales reported earlier today indicate a chance that growth may even surpass our above-consensus forecasts for both the eurozone and the U.K. in Q2 and for 2021 as a whole,” said Holger Schmieding, chief economist at Berenberg Bank.

The U.K. reported a 9.2% surge in retail sales for April, a gain that doubled forecasts, with nonfood segments in the driver’s seat as the country’s COVID-19 restrictions eased up.

“Central banks will have to take note. But with inflation pressures in the Eurozone more subdued than in the fiscally supercharged U.S., the ECB [European Central Bank] can nonetheless move cautiously perhaps reducing its pace of asset purchases modestly at its 10 June meeting after having stepped it up significantly in March at the tail end of the shallow double-dip recession,” Schmieding added.

“Also, there are reports that businesses which have a greater exposure to Europe and European stocks should outperform their peers in the coming weeks and months given that the vaccination efforts are paying off and the reflation period should help increasing appetite in the region as well,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients.

Apparel and footwear makers were in the lead, along with industrial machinery companies, and banks also perked up.

Shares of Cie. Financière Richemont
CFR,
+5.41%

surged 5%, after the luxury-goods group said its core jewelry segment and Asian sales drove a fiscal-year 2021 net profit, despite a revenue decline. The luxury-goods group proposed a dividend for the year.

Shares of Deutsche Lufthansa
LHA,
-6.37%

slid over 5%, on a report that the airline’s second-biggest shareholder, the Thiele family, will sell over half of its stake, following the death of Heinz Hermann Thiele earlier in the year, two sources told Reuters on Thursday. A Lufthansa spokesperson declined to comment.

Read: WHO Europe advises avoiding international travel for now as concern about vaccine inequity grows

Shares of Trainline
TRN,
-1.46%

continued to fall, dropping 2.6% a day after the U.K. government outlined a railroad infrastructure plan that would include operating a rival ticketing app.

Read: George Soros and Citadel among the winners as Trainline shares plunge

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