Written by Pranav Kashyap
(Reuters) – European stocks rose on Friday, supported by energy shares in the region, after prices rose on concerns about a deeper conflict in the Middle East.
The European index rose 0.2%. However, the index is on track to record its worst week since September 2, if losses continue.
The index fell by about 2% this week as investors refrained from making big bets amid escalating tensions in the Middle East.
The only sector to shine was the energy sector, which has jumped 4.5% so far this week. The sector is on track to achieve its best weekly performance in nearly six months, and also emerged as the only sub-index to record positive gains this week. (or)
On the other hand, the automotive sector was the worst performing sector this week with a decline of almost 7%. The poor performance was led by Italian-American automaker Stellantis (NYSE:), which lost nearly 17% this week after a warning about profits and the sustainability of the company’s dividend.
“The tensions in the Middle East are certainly giving investors pause, but I can’t really say what the risk-off sentiment is. Investors are still trying to assess the ramifications and it’s very difficult in Europe,” said Thomas Gillen, chief market strategist. In S.G. Kleinwort Hambros.
Investors will be anticipating speeches from a slew of ECB officials – Luis de Guindos, Claudia Buch and Frank Elderson – who are scheduled to speak at various events during the day.
All eyes will also be on the European Central Bank as it meets on October 17 to decide on borrowing costs, with traders pricing in a full rate cut.
“The ECB does not have the history that the US Federal Reserve has of taking huge steps. The situation is not bad for emergency cuts. However, we expect them to cut by 25 basis points and to continue cutting over the coming months,” Gehlen added.
Interest rate-sensitive real estate stocks also provided support with a jump of about 1%.
Among individual stocks, Danish stock DSV jumped 6.4% after the Danish carrier raised $5.5 billion in a share issue to partly finance its acquisition of Schenker.
Shares of shipping groups fell after dockworkers and port operators on the US East Coast reached a wage agreement to settle the industry’s biggest work stoppage in nearly half a century.
Shares of A.P6 Moeller-Maersk and Hapag-Lloyd fell by 7.5% and 12.4%, respectively.