European shares were largely muted on Friday, but marked their sixth straight weekly gains, with luxury stocks flying high on the back of strong earnings from Cartier-owner Richemont SA.
The pan-European STOXX 600 closed up 0.3 percent at 486.75 after hitting a fresh record-high earlier in the trading session. It rose 0.7 percent for the week.
Richemont surged 8.6 percent on Friday after beating profit estimates in the first half of the fiscal year and saying it is seeking investors for its loss-making Yoox business, in a move widely expected to appease shareholders.
The luxury sector also got a boost from France’s LVMH Moet Hennessy Louis Vuitton SE, which gained 0.9 percent on news that Louis Vuitton was planning to open its first duty-free store in China.
French blue-chip shares were at all-time highs, with automaker Renault SA jumping 3.7 percent after Morgan Stanley upgraded its stock.
“The earnings season is confirmation to markets that the underlying growth and demand picture is still very strong, even though there are companies talking about supply issues and margin pressures going forward,” Principal Global Investors chief strategist Seema Shah said. “But you’re probably going to get to a point where returns get smaller and you see more volatility — investors will have to make that adjustment in their minds.”
The STOXX 600 has seen fresh record highs this month, buoyed by dovish central bank messages, upbeat earnings reports and signs of post-pandemic economic revival.
However, European Central Bank policymakers said on Friday that eurozone inflation might decline more slowly than earlier thought, partly due to supply chain bottlenecks that were more persistent than previously expected.
Further, Europe has become the epicenter of COVID-19 again, with Germany, France and the Netherlands experiencing a surge in infections, and prompting some governments to consider reimposing lockdowns.
Oil and mining stocks led losses in the STOXX 600, dipping 0.8 percent each as crude and metal prices were dented by a firmer US dollar.
Italian infrastructure firm Atlantia SpA rose 0.5 percent after raising its forecast for this year, while Dutch oil and chemical storage group Vopak NV advanced 1.2 percent after beating estimates for quarterly profit.
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