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European stocks gain on strong data, US equities are mixed

·3-min read
Apple chief Executive Tim Cook testified Friday in a closely-watched antitrust lawsuit filed by 'Fortnite' videogame creator Epic Games

European equities advanced Friday following strong economic data, while US markets ended a volatile week on a muted note amid lingering inflation concerns.

Investor sentiment brightened after survey data showed eurozone business activity grew at its fastest rate in three years, as Europe's economy emerges from months of Covid-19 restrictions.

IHS Markit's Purchasing Managers' Index (PMI) index of eurozone activity rose to a strong 56.9 in May from 53.8 in April, well above the 50-point level that indicates growth.

"Demand for goods and services is surging ... as the region continues to reopen from covid-related restrictions," said Chris Williamson, chief business economist at IHS Markit.

"Growth would have been 'even stronger' had it not been for supply chain delays and difficulties restarting businesses quickly enough to meet demand," he added.

Frankfurt stocks added 0.4 percent overall, and Paris won 0.7 percent as exchanges headed into the weekend.

London was flat however, as investors had already priced in an expected surge in British retail sales as the UK economy gradually emerges from a lockdown period.

"Covid cases on the continent are declining, lockdown restrictions are easing, and economic data is strengthening," said analyst Sophie Griffiths at trading firm OANDA.

She added that the region appeared to be mounting a "powerful rebound" from its Covid-induced recession.

Wall Street, meanwhile, had a mixed day, with the Dow climbing and the Nasdaq moving lower.

After three straight declines, major indices won strong gains on Thursday, but markets failed to extend the rally in Friday's muted session.

"Basically for the past year, stocks have rallied strongly on the idea that the economy will reopen," said Karl Haeling of LBBW. "Now we are shifting to a new phase where we have to evaluate how long lasting will this recovery be."

Analysts pointed to lingering questions over inflation and the possibility of a sudden shift in Federal Reserve policy. A note from Charles Schwab investment bank described Fed uncertainty as "palpable, as signs of rising inflation figures continue to pour in."

Oil prices took a stab at recovering from this week's sharp selloff, while the euro declined against the dollar.

Among individual companies, Apple fell 1.5 percent after Chief Executive Tim Cook defended the company in a high-stakes trial challenging the company's tight control of its online marketplace.

Cook's testimony caps the proceedings which opened earlier this month in which Apple is accused by video game developer Epic Games of abusing a monopoly on its marketplace through the creation of a "walled garden" that squeezes app makers.

- Key figures around 2050 GMT -

New York - Dow: UP 0.4 percent at 34,207.84 (close)

New York - S&P 500: DOWN 0.1 percent at 4,155.86 (close)

New York - Nasdaq: DOWN 0.5 percent at 13,470.99 (close)

London - FTSE 100: FLAT at 7,018.05 (close)

Frankfurt - DAX 30: UP 0.4 percent at 15,437.51 (close)

Paris - CAC 40: UP 0.7 percent at 6,386.41 (close)

EURO STOXX 50: UP 0.7 percent at 4,025.78 (close)

Tokyo - Nikkei 225: UP 0.8 percent at 28,317.83 (close)

Hong Kong - Hang Seng Index: FLAT at 28,458.44 (close)

Shanghai - Composite: DOWN 0.6 percent at 3,486.56 (close)

Euro/dollar: DOWN at $1.2185 from $1.2228 at 2100 GMT on Thursday

Pound/dollar: DOWN at $1.4150 from $1.4190

Euro/pound: DOWN at 86.07 pence from 86.16 pence

Dollar/yen: UP at 108.95 yen from 108.78 yen

Brent North Sea crude: UP 2.0 percent at $66.44 per barrel

West Texas Intermediate: UP 2.7 percent at $63.58 per barrel