Earnings up, but on track for a negative month

LONDON — European markets closed higher on Friday as global stocks received a boost from strong corporate earnings, but remained negative for the month of April.

The pan-European Stoxx 600 index closed 0.7% provisionally higher, with basic resources rising 2.6% to lead gains as most sectors and major stocks ended in positive territory.

However, the index was down more than 1% for the month as investors navigated the last trading day of April.

Friday was another busy day for earnings in Europe, with BASF, AstraZeneca, Reckitt, Eni, NatWest, Pearson and MTU Aero Engines among those reporting before the bell, while Daimler and Credit Suisse hold annual general meetings.

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In terms of individual stock price movement in Europe, Johnson Matthey soared almost 19% to lead the Stoxx 600 after Standard Investments, the investment arm of US industrial firm Standard Industries, acquired a 5% stake. 23% in the British chemical company.

Towards the bottom of the blue-chip index, shares of BE Semiconductor fell more than 9% after its first-quarter earnings report.

As for the data, euro zone inflation reached an all-time high for the sixth consecutive month in April, hitting 7.5% year over year after 7.4% in March and raising further questions about how the European Central Bank will react.

Euro zone GDP grew 0.2% in the first quarter and 5% year-on-year as the war in Ukraine dampened economic growth across the bloc, official estimates revealed on Friday.

The French economy stalled in the first quarter of the year as weak domestic demand continued despite the easing of Covid-19 restrictions. The euro zone’s second-largest economy was unchanged after growing 0.8% in the final quarter of 2021, and economists in a Wall Street Journal survey had projected a quarterly expansion of 0.3%.

On Wall Street, US stocks fell on Friday, and the Nasdaq fell sharply after disappointing quarterly results from Amazon and Apple.

Meanwhile, global investors continued to monitor the war in Ukraine and its geopolitical implications, after Russian President Vladimir Putin warned the West of a “lightning-quick” response to countries involved in the war.

Russia surprised the European community by cutting off gas supplies to Poland and Bulgaria on Wednesday because they had refused to pay for the gas in Russian rubles, as demanded by Moscow.

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