European Stocks Close On Firm Note On Earnings

European stocks closed higher on Friday and recorded their best weekly performance in seven months, as optimism about earnings helped offset concerns over inflation and higher interest rates.

Investors also reacted to U.S. President Joe Biden signing legislation to temporarily raise the government's debt limit to $28.9 trillion, pushing back the deadline for debt default to December from mid-October.

The pan European Stoxx 600 climbed 0.74%. The U.K.'s FTSE 100 gained 0.37%, Germany's DAX surged up 0.81% and France's CAC 40 gained 0.63%, while Switzerland's SMI advanced 0.58%. The FTSE 100 gained about 1.9% in the week, while CAC 40 and DAX gained 2.6% and 2.5%, respectively.

Among other markets in Europe, Austria, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Portugal, Spain and Sweden closed higher.

Norway, Poland and Turkey drifted lower, while Belgium, Czech Republic and Russia ended flat.

Bank stocks were in demand after top U.S. banks JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Morgan Stanley all reported stronger than expected quarterly results.

Despite data showing a drop in new car registrations in Europe, shares of automakers found support.

In the UK market, Ocado Group, Evraz, IAG, Intercontinental Hotels Group, British Land, Antofagasta and Flutter Entertainment gained 2 to 4%.

Land Securities, Royal Dutch Shell, HSBC Holdings and Natwest Group all gained nearly 2%. Ashtead Group, Entain, Barclays, Whitbread, BP, Ferguson, Segro, Royal Dutch Shell and Glencore also posted strong gains.

Jupiter Fund Management gained about 2.2%. The asset manager reported a rise in assets under management as positive investment performance offset net outflows.

Pearson Plc shares plunged 14.9% after the publication company said that higher-education sales fell 7% in the nine months through September, partly due to lower enrollments at community colleges.

Severn Trent, Smurfit Kappa Group, Informa, Smith (DS), Burberry Group, Hargreaves Lansdown, Rio Tinto and Polymetal International shed 1.4 to 2.7%.

In the French market, Air France-KLM climbed 4.7% and Renault gained 3.5%. Accor, Essilor, Technip, Credit Agricole, Valeo, BNP Paribas, Societe Generale, Faurecia, Safran, Michelin and Unibail Rodamco gained 1.4 to 2.6%.

Cloud computing services company OVHcloud rose sharply on debut.

In Germany, RWE and Hello Fresh both gained more than 4%. Deutsche Bank, Adidas, Porsche Automobil, E.ON, Zalando, BMW, Airbus, Continental, Volkswagen and Allianz gained 1 to 3.2%.

Shares of German fashion retailer Hugo Boss advanced 1.1%. The company raised its outlook for the current year after reporting over 40 percent growth in group sales for the third quarter, mainly due to the particularly strong development of business in Europe and America.

Swiss banking software firm Temenos plunged nearly 14% after the lender missed third-quarter revenue expectations.

According to data from statistical office Insee, French consumer price inflation came in at negative 0.2% month-on-month in September. On an annual basis, it was 2.7% higher.

France's consumer price inflation rate was revised slightly higher to 2.2% year-on-year in September 2021, up from a preliminary estimate of 2.1% and compared with 1.9% in the previous month.

European new car registrations declined for a third month in a row in September and marked the lowest level for the month since 1995, data from the European Automobile Manufacturers' Association, or ACEA, showed Friday.

Passenger car registrations shrank 23.1% year-on-year to 718,598 units in September after a 19.1% fall in August.

The latest decline was largely caused by a lack of supply of vehicles due to the ongoing semiconductor shortage, the Brussels-based ACEA said.

All major EU markets recorded double-digit declines. Italy logged the worst fall of 32.7%, followed by Germany with a 25.7% slump. Sales decreased 20.5% in France and 15.7% in Spain.

Eurozone visible trade surplus for August decreased from a year ago, defying expectations for an improvement, preliminary data from Eurostat showed Friday.

The goods trade surplus in August was EUR 4.8 billion versus EUR 14.0 billion in the same period last year. Economists had forecast a surplus of EUR 16.1 billion.

Exports rose 18.2% year-on-year and imports grew 26.6%.

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