Europe close: Shares shrug off eurozone GDP, inflation data to finish higher
By Frank Prenesti
Date: Friday 29 Apr 2022
(Sharecast News) - European markets closed higher on Friday despite weaker first-quarter growth and higher inflation in the eurozone as shares in UK chemicals company Johnson Matthey soared on news a US fund had taken a 5% stake in the firm.
The pan-European Stoxx 600 index closed up 0.74%, off gains of 1% earlier in the session, with all major bourses following suit. US shares had opened weaker after quarterly results from Amazon and Apple disappointed investors.
Chris Beauchamp, chief market analyst at online trading platform IG, said a "gulf has opened between Europe and the US, as the former rally while the latter drops back".
"US stocks enjoyed such a strong day yesterday that some caution was inevitable, while the mixed picture following US tech earnings and the contraction in US GDP isn't helping sentiment on Wall Street. But higher commodity prices have helped stabilise industrial European stocks, and crucially the magic promise of Chinese stimulus has appeared, pushing up commodity prices and giving stocks across the continent a lift."
Official data from the European Union revealed growth in the eurozone economy weakened during the first quarter while inflation hit a new record in April, as energy and food prices continued to spiral.
Gross domestic product in the 19 country zone grew 0.2% in the first three months of the year, compared with 0.3% in the previous quarter, according to Eurostat. Economists had forecast growth to remain stable.
The cost of living in the single currency bloc also continued rising in April as inflationary pressures broadened out from energy. According to Eurostat, in seasonally adjusted terms, the euro area consumer price index jumped at a month-on-month pace of 0.6%.
That pushed the annual rate of increase from 7.4% in March to 7.5% in April, as expected by the consensus.
In equity news, shares in Johnson Matthey were up as much as 35% at one point after the investment arm of New York-based industrial firm Standard Industries, led by David Millstone and David Winter, took a 5.23% stake. The shares finished the day 20% higher.
Dutch investment group Prosus, which owns a 29% stake in Tencent, tracked the Chinese tech giant's rise on Friday after China said it would implement measures to aid the development of its platform economy.
German consumer goods group Henkel slid more than 6% after cutting its 2022 profit forecast on the back of rising material costs as a result of the Russia-Ukraine war.
Hikma Pharmaceuticals shares fell as the company reported headwinds at its generics business.
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