European shares eye upbeat end to week

Europe’s STOXX 600 edged higher on Friday, with gains in healthcare firms and banks putting the index on course to end the last week before Christmas on an upbeat note.

The region-wide STOXX 600 (.STOXX) rose 0.2% at 0915 GMT and was bound for a 0.8% weekly advance.

With the early gains, the index looks set to recoup a small part of last week’s staggering 3.3% loss, which was driven by heightened concerns of a recession after the US Federal Reserve and the European Central Bank signalled a prolonged rate-hike cycle.

US data on Thursday, showing a tight labour market and economic resilience, exacerbated those worries and dented expectations of a so-called “Santa rally” before the year-end, reported Reuters.

Still, upbeat earnings from Nike (and FedEx Corp earlier this week and improving consumer confidence in the US and euro zone have offered some hope that the economic downturn caused by sharp interest rate hikes may not be as bad as feared.

Morale amongst Italian businesses and consumers rose in December, data showed on Friday, although the manufacturing sector was more downbeat.

“Investors have been weighing up some better-than-expected corporate earnings this week against macroeconomic concerns about rising interest rates and a global slowdown,” said Victoria Scholar, head of investment at Interactive Investor.

Thin trading volumes around the holidays could also be exacerbating market moves, Scholar added.