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European stocks slip but head for best week since November 2020
Global Banking & Finance Review®
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By Sruthi Shankar
(Reuters) – European shares struggled for momentum on Friday after strong gains earlier this week, as investors focussed on Russia-Ukraine peace talks that have shown no tangible progress so far.
The pan-European STOXX 600 index slipped 0.2%, with automakers and energy stocks leading the morning declines.
Still, the benchmark was headed for its best weekly performance since November 2020 on optimism that peace would be negotiated in the Ukraine conflict that has rattled global markets.
U.S. President Joe Biden is expected to deliver a warning that Beijing will pay a price if it supports Russia’s war effort when he speaks to Chinese counterpart Xi Jinping in a call scheduled for 1300 GMT.
“In European markets, we’re very close to the levels we’re at before the war. We’re very far from pricing a negative scenario here. If you look at earnings revisions … we’re still expecting some huge earnings growth for 2022,” said Alexandre Deruaz, head of portfolio management at Unigestion.
“The impact on the growth cycle is coming from oil. I think we’ve passed the point of maximum price in the short term for oil. So everybody is recognising that inflation is going through the roof, but at some point it will have a lesser impact.”
Crude prices hit as much as $139 a barrel last week on concerns about Western sanctions on Russia, a major commodities exporter, raising concerns about soaring inflation.
But they have retreated from those levels and were trading around $107 a barrel on Friday, pushing down energy stocks by 0.8%. [O/R]
Britain’s Vodafone rose 1.4% after Reuters reported that global infrastructure funds have approached the telecom giant to invest in its $16 billion mast company Vantage Towers. The latter’s stock gained 10.6%.
German real estate giant Vonovia slipped 1.8% even as it said it was on course for “significant growth” after a record year and the acquisition of smaller rival Deutsche Wohnen in 2021.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva and Aditya Soni)
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