European stocks ended slightly higher yesterday, halting a week-long sell-off, with Airbus rising after sources said the European plane maker is set to clinch a deal with Rolls-Royce for A330 engines.
Airbus shares gained 1.6 per cent while Rolls-Royce shares were up 2.2 per cent after sources told Reuters Airbus is set to upgrade its A330 with engines provided exclusively by Rolls-Royce, opening a new chapter in the fight for wide-body jet orders with Boeing’s 787 Dreamliner.
The FTSEurofirst 300 index of top European shares ended 0.1 per cent higher at 1,371.29 points.
The index lost 1.7 per cent during the week, hurt by downbeat US growth data as well as worries over violence in Iraq, snapping a 10-week long run of weekly gains – its longest winning streak since mid-2012.
The week was also marked by investment outflows, with European equity funds suffering redemptions of $1.6 billion, their biggest outflows in over a year, according to data from BofA Merrill Lynch Global Research.
Around Europe, UK’s FTSE 100 index was up 0.3 per cent, Germany’s DAX index up 0.1 per cent, and France’s CAC 40 down 0.1 per cent.
The eurozone’s blue-chip Euro STOXX 50 index lost 0.2 per cent, to 3,227.85 points, with its retreat limited by a strong support level at 3,225, representing the index’s 50-day moving average.
Shares in Barclays stabilised, up 0.5 per cent, following their 6.5 per cent drop on Thursday after New York’s attorney general filed a securities fraud lawsuit accusing it of giving an unfair edge to its US high-frequency trading clients in its “dark pool” business.
Despite the market’s losses in the past week, the FTSEurofirst 300 is up 4.1 per cent since the start of the year, hovering below a six-and-a-half-year high hit earlier this month.
A Reuters poll released on Thursday showed that investors are bullish over the outlook for European shares in the second half of the year, betting on them extending their rally, helped by the ECB’s stimulus measures.
“The ample liquidity and the expectation of a pick-up in earnings is keeping bourses in green,” said Philippe Uzan, chief investment officer at Edmond de Rothschild AM, which has €164 billion under management.
“Within the equity space, we still prefer European stocks ... the slight improvement in the region’s economies should boost corporate profits in the second part of the year.”
According to data from Thomson Reuters Datastream, profits for European companies are expected to rise by 7.5 per cent in 2014.