On Friday European stocks climbed, with the benchmark Stoxx Europe 600 Index paring this week’s drop, as the Group of Eight said the global economy is strengthening. Asian shares rose and U.S. index futures were little changed.
Banking shares gained 0.9 percent as a group after Citigroup Inc. raised its recommendation on the sector to “overweight.” Lloyds Banking Group Plc jumped 2.8 percent, while BNP Paribas SA rose 1.9 percent. Xstrata Plc, the largest exporter of coal used by power stations, and Rio Tinto Group, the third-biggest mining company, led gains in basic-resource companies as metal prices rallied in London.
Gains in heavyweight banks lifted European stocks on Friday on a report that lenders could evade part of the Basel III capital requirements, while technical indicators pointed to further short-term gains for equities.
Banks rose after the Financial Times reported draft legislation could place a lighter burden than previously expected on the capital positions of European Union banks, and could allow lenders to count more of the capital in their insurance subsidiaries.
Data on Thursday showed U.S. first-quarter economic growth was unrevised at 1.8 percent, against expectations of an upward revision, while applications for unemployment insurance rose unexpectedly in the latest week.
Highlighting further concerns about the pace of growth in the global economy, ratings agency Fitch revised its outlook for Japan to "negative" from "stable," putting some pressure on European stocks.
Gains in heavyweight mining shares also helped underpin the equity market, as copper prices rose sharply on the back of a weak dollar following disappointing U.S. economic growth figures on Thursday.
Japanese stocks fell, sending the Nikkei 225 Stock Average to a third straight weekly decline, as reports showed the U.S. economy grew at a slower than estimated rate, reducing the earnings outlook for Japanese exporters. The Nikkei 225 fell 0.4 percent while the Topix index dropped 0.3 percent.
This article was compiled by Valletta Fund Management Limited, a member of the BOV Group. Valletta Fund Management,
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