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European Markets Close On Strong Note Amid Slightly Easing Worries Over Inflation

Despite a batch of weak economic data, European stocks had their best session in more than three months on Friday as investors went on a buying spree, grabbing several battered down stocks, amid slightly easing worries about inflation.

Aggressive policy tightening by the Federal Reserve, the Bank of England and a few other central banks has stoked fears of a recession. Fed Chief Jerome Powell said in his testimony before the Congress earlier this week that a recession is a "possibility," and reiterated that the central bank is "strongly committed" to its aim of bringing down inflation.

The pan European Stoxx 600 surged 2.62%. The U.K.'s FTSE 100 climbed 2.68%, Germany's DAX gained 1.59% and France's CAC 40 spurted 3.23%, while Switzerland's SMI ended stronger by 3.54%.

The Stoxx 600 gained about 2.4% in the week, while the FTSE 100, CAC 40 and the DAX gained about 1.9%, 3.2% and 2%, respectively.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Turkey closed with sharp to moderate gains.

Greece, Russia and Sweden drifted lower.

In the UK market, Hikma Pharmaceuticals, Ashtead Group, Croda International, Spirax-Sarco Engineering, Dechra Pharmaceuticals, Prudential, Howden Journey, ABRDN and IHG gained 5 to 6%.

Flutter Entertainment, RS Group, ICP, Pershing Square Holdings, Halma, JD Sports Fashion, Scottish Mortgage, Burberry Group, RightMove, AstraZeneca, Tesco, Diageo, British Land Co., WPP, Aviva and 3I Group were among the other major gainers.

Ultra Electronics soared nearly 13% in London after Cobham received the green light to take over the defense supplier.

Centrica and Rolls-Royce Holdings shed about 2% and 1.1%, respectively. Aveva Group ended modestly lower.

In the French market, Pernod Ricard, L'Oreal, Schneider Electric, Dassault Systemes, Teleperformance, LVMH, Danone, Essilor, Carrefour, Sodexo, Credit Agricole, Veolia, Vinci, BNP Paribas, Kering, Saint Gobain, Bouygues and Publicis Groupe gained 3 to 5.4%.

Sanofi climbed more than 5% after the drug major announced positive data from their vaccine trial which evaluated an adjuvanted bivalent D614 and Beta (B.1.351) vaccine candidate.

Valeo drifted down nearly 3%. Renault and Air France-KLM also declined sharply.

In Germany, Merck, Sartorius, Siemens Healthineers, Symrise, Puma, Deutsche Bank and Covestro gained 4.5 to 6%. Siemens, SAP, Qiagen, Deutsche Post, Deutsche Wohnen, Infineon Technologies, Vonovia, Munich RE, Adidas, Fresenius Medical Care, BASF and HeidelbergCement also rallied sharply.

RWE ended nearly 3% down. E.ON, Bayer, Continental and Zalando shed 1 to 1.6%.

Swiss insurance firm Zurich Insurance Group jumped 4.2% after it agreed to sell its legacy traditional life insurance back book in Germany to Viridium Holding AG.

On the economic front, data from the Office for National Statistics showed UK retail sales declined in May as high cost of living pulled consumer sentiment to a record low and weighed on households' spending in food stores.

Retail sales volume dropped 0.5% month-on-month in May, reversing a revised 0.4% increase in April. Economists had forecast sales to drop 0.7% after April's initially estimated 1.4% increase.

Germany's business sentiment worsened more than expected in June as companies were less satisfied with their current business conditions and they remained pessimistic regarding the outlook, survey results from the ifo Institute showed.

The business confidence index dropped to 92.3 in June from 93.0 in the previous month. The index was forecast to fall marginally to 92.9.

The current situation index fell to 99.3 from 99.6. That was above the expected reading of 99.1. The expectations index eased to 85.8 from 86.9 in the previous month. Economists had forecast the index to rise to 87.4.

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