By Peter Nurse
Investing.com - European stock markets weakened Friday, with the recent hawkish turn by the Federal Reserve as well as concerns over Russia’s intentions for Ukraine weighing on sentiment despite some strong corporate news.
By 3:10 AM ET (0840 GMT), the DAX in Germany traded 0.2% lower, the CAC 40 in France dropped 0.6% and the U.K.’s FTSE 100 fell 0.6%.
Global stock markets have been pressured this week by the indications that the U.S. Federal Reserve is likely to raise rates as many as five times this year, starting in March.
Concerns remain over Russia’s plans for Ukraine after Moscow said on Thursday it was clear the United States was not willing to address its main concerns, which revolve around the possibility of Ukraine joining NATO. Russia has massed troops near Ukraine, prompting Western fears of an invasion.
These fundamental factors have weighed on sentiment Friday, even with Apple (NASDAQ:AAPL), the largest company in the world by market capitalization, posting record sales over the important holiday quarter.
Back in Europe, UniCredit (MI:CRDI) stock rose 0.6% after the Italian bank continued the recent good news for the sector, reporting better-than-expected full-year revenues and underlying profit. It confirmed it will pay its first dividend since the pandemic began but is still awaiting ECB approval for its planned buyback. That is expected in February.
H&M (ST:HMb) stock soared over 5% after the world’s second-largest fashion retailer reported a bigger profit rise than expected for the September-November period as sales recovered and said it expects to double sales by 2030.
LVMH (PA:LVMH) stock rose 3% after the French luxury giant reported an impressive fourth quarter, with demand for its high-quality products surging. Sales topped 2019 levels, while profit was up 50% from a year earlier.
On the flip side, Givaudan (SIX:GIVN) stock fell 4.4% after the Swiss fragrance and flavour maker posted a weaker-than-expected rise in net profit and dividend for 2021, while STMicroelectronics (PA:STM) stock dropped 1.4% after the semiconductor forecast that chip shortages will last into 2023.
The economic data slate offered up some good news, with French and Spanish GDP growing faster than expected in the fourth quarter. The French economy grew by 0.7%, and by 7% in 2021 as a whole, the strongest since 1969. That will offset an expected decline in German GDP in the quarter, which is expected to be confirmed later Friday.
Oil prices pushed higher Friday, on course for their sixth consecutive weekly gain, with the market remaining concerned over supply levels ahead of the latest meeting of top producers.
The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, is expected to stick with its plan to increase output in a cautious manner in March when it meets next week.
By 3:40 AM ET, U.S. crude futures traded 0.4% higher at $86.92 a barrel, having climbed to a seven-year high of $88.54 on Thursday, while the Brent contract rose 0.3% to $88.39, just off the previous session’s peak, which was the highest since October 2014.
Additionally, gold futures fell 0.1% to $1,791.50/oz, while EUR/USD traded 0.2% lower at 1.1124.