By Carla Mozee and Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stocks markets ended a volatile
day on an upbeat note on Friday after U.S. housing data spurred a
positive mood on both sides of the Atlantic, while a fall in German
business confidence prompted investors to assess the chances of
action by the European Central Bank.
The Stoxx Europe 600 index added 0.2% to close at 341.76, ending
0.8% higher for the week, for a sixth straight weekly gain.
The benchmark started to advance in the afternoon after U.S.
stocks opened in positive and data showed homes sales for April
beat expectations.
Earlier in the day, European markets hovered around the flat
line after the widely watched Ifo Business Climate Index fell to
110.4, missing expectations for 110.9. The Ifo expectations and
current-conditions surveys for Germany -- Europe's largest economy
-- also fell short of projections.
The overall Ifo is still at elevated levels "but it has clearly
been shaken by the recent events in Ukraine and the lackluster pace
of recovery in [the euro zone] as a whole," said Boris Schlossberg,
managing director of FX strategy at BK Asset Management, in a note
on Friday.
The euro (EURUSD) fell to $1.3626 compared with $1.3644 just
ahead of the confidence data. Schlossberg said the Ifo data will
prompt an interest-rate cut and consideration of other easing
measures by the ECB.
"The key question now is just how aggressive will ECB be," he
said. "Most of the market participants expect a rate cut both in
refi and deposit rates--something that should spur even more
spending from the penny-pinching Germans, as saving will become
even less attractive."
Germany's DAX 30 index gained 0.5% to 9,768.01, marking the
highest closing level on record. For the week, the index picked up
1.4%. Earlier, German government figures confirmed economic growth
in the first quarter. On the DAX, shares of Lanxess AG rose 1.5%
after Goldman Sachs lifted the chemicals firm to buy from
neutral.
Elsewhere, France's CAC 40 index nudged higher by 0.3% to
4,493.15, for a 0.8% gain on the week. But the U.K.'s FTSE 100
index shed 0.1% to 6,815.75, as Tullow Oil PLC fell 1.2% after the
company said only traces of thermogenic gas were found in the
Shimela-1 well in Ethiopia. The London benchmark fell 0.6% on the
week.
But shares of Barclays PLC (BCS) in London gained 1.3% after the
U.K.'s Financial Conduct Authority said the bank will be fined more
than GBP26 million ($43.9 million) for failings around the London
Gold Fix. The bank and an ex-trader, Daniel James Plunkett, avoided
higher fines of more than GBP37 million and GBP136,600,
respectively, by agreeing to settle at an early stage.
Meanwhile, Pandora AS shares fell 4.2%, the steepest loss on the
Stoxx 600, after the Danish jewelry retailer said it was selling 13
million shares to institutional investors.
In other developments, Europeans in 28 countries have or will
vote in European Parliament elections. So-called euroskeptics, or
parties that want to break down the power of the EU, look set to
take more seats than ever. Voting ends on Sunday.
Trading in the U.K. will be closed Monday for the Bank
holiday.
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