The majority of the European markets ended Friday's session in negative territory, extending the weakness from the previous day. The continued weakness in the U.S. markets contributed to the negative mood. Better than expected economic data from Germany and from the U.S. were unable to boost the markets into the green. Banks and mining stocks were again among the weakest performers at the end of the trading week.
The Economic and Monetary Union (EMU) is a more stable union today than it was a year ago, European Central Bank President Mario Draghi said Thursday. Also "markets are fully confident that the euro is a strong and stable currency," he said in a speech in London.
Speaking on the deep financial and economic interconnectedness between Europe and the UK, Draghi said Europe needs "a more European UK" as much as the UK needs a more British Europe.
Eurozone's economic activity will likely stabilize sooner rather than later, supported by the gradually improving consumer confidence and the boost to purchasing power coming from low inflation, IHS Global Insight Chief UK and European Economist Howard Archer said.
The economist, however, cautioned that it would be unrealistic to expect a marked overall pick up in consumer spending for the time being at least as consumers in the currency bloc continue to face high and rising unemployment, generally muted wage growth and tight fiscal policy.
The renewed improvement in Germany's economic sentiment indicates that the economy is set to record stronger growth in the second quarter, Capital Economics Senior European Economist Jennifer McKeown said Friday.
Capital Economics said that the faster-than-expected rise in business sentiment, as revealed by the latest survey by the Ifo Institute, signals that the German economy will likely expand 2 percent annually in the second quarter, following the first quarter's 0.3 percent contraction.
Bank of England policymaker Paul Fisher said Friday that his vote at the monetary policy committee for extra bond purchases in the past few months was driven by the need to continue supporting the ongoing balance-sheet adjustments across the economy.
"My policy vote has been driven by the need to continue supporting the required real adjustments - which still have much to work through - but cautiously, so as not to risk inflation expectations becoming de-anchored," Fisher, who is an MPC member and the central bank's Executive Director for markets, said.
He said it is likely that growth will continue to be below its previous trend until more of the real adjustments to balance sheets across the economy have been made. Nonetheless, he said the economy "may be beginning to see some signs of a pick-up", though a return to boom conditions is unlikely anytime soon.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.39 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.12 percent.
The DAX of Germany dropped by 0.56 percent and the CAC 40 of France fell by 0.26 percent. The FTSE 100 of the U.K. decreased by 0.63 percent, but the SMI of Switzerland rose by 0.00 percent.
In Frankfurt, Deutsche Bank and Commerzbank lost 0.44 percent and 2.63 percent, respectively.
Daimler declined by 1.32 percent. Barclays downgraded the stock to ''Underweight'' from ''Equalweight.''
Bernstein upgraded Linde to ''Outperform'' from ''Market-Perform.'' The stock finished higher by 1.06 percent.
Credit Suisse reinitiated Deutsche Telekom with an ''Outperform'' rating. The stock closed up by 0.22 percent.
Metro gained 0.04 percent, even after a downgrade at Commerzbank.
In Paris, Unibail-Rodamco finished lower by 1.57 percent. The real estate investment trust was downgraded to ''Neutral'' from ''Buy'' at UBS.
Michelin rose by 0.24 percent, but carmaker Renault fell by 0.69 percent.
BNP Paribas decreased by 1.25 percent. Credit Agricole fell by 1.89 percent and Societe Generale lost 0.81 percent.
In London, UBS upgraded the UK bank sector to ''Overweight'' from ''Neutral.'' However, HSBC declined by 2.13 percent and Royal Bank of Scotland lost 3.02 percent. Lloyds Banking Group fell by 0.89 percent and Barclays lost 1.38 percent.
Next decreased by 2.37 percent, after Morgan Stanley downgraded the stock to "Underweight" from "Equal weight."
BT Group dropped by 2.04 percent, after JP Morgan downgraded the stock to "Neutral" from "Overweight."
Pawnbroking services provider H&T Group said volatile gold price would impact results. The stock plunged by 11.29 percent.
S&U increased by 4.76 percent, after the home credit and motor finance provider said its trading remains in line with overall expectations.
A rebound in consumer spending helped the German economy thwart recession in the first quarter of 2013, detailed data from the Federal Statistical Office revealed Friday. However, the continued fall in firms' fixed asset investment and extreme weather conditions stifled the recovery.
Nonetheless, the economy is likely to get further boost from consumers with market research group GfK predicting further improvement in consumer confidence in June.
Gross domestic product rose 0.1 percent quarter-on-quarter in the first quarter. The growth figure, adjusted for seasonal and calendar variations, was unchanged from the preliminary estimate released on May 15. This comes after a steep 0.7 percent contraction in the fourth quarter of 2012.
Sentiment among German companies strengthened in May for the first time since February due to an improvement in current conditions, indicating that the economy remains on track despite a challenging environment.
The business sentiment index rose to 105.7 in May from 104.4 in April, a survey carried out by the Ifo institute among 7,000 executives, showed Friday. The reading was forecast to remain unchanged at 104.4.
Germany's consumer confidence is set to strengthen in June, results of a survey by market research firm GfK showed Friday. The forward-looking index for June rose to 6.5 in June from 6.2 in May. Economists had forecast the indicator to remain unchanged at 6.2.
French business confidence increased more than expected to 92 in May from 88 in April, survey results showed Friday. It was forecast to rise to 89.
Mortgage approvals in the UK increased less than expected in April, the latest figures from the British Bankers' Association (BBA) showed Friday. The number of loans approved for house purchase rose to 32,153 in April from 31,401 in March. Economists expected it to rise to 32,800.
After reporting a sharp drop in new orders for manufactured durable goods in the previous month, the Commerce Department released a report on Friday showing that durable goods orders rebounded by more than anticipated in the month of April.
The report said durable goods orders surged up by 3.3 percent in April after tumbling by a revised 5.9 percent in March. Economists had expected orders to climb 1.1 percent compared to the 5.7 percent drop that had been reported for the previous month.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.