[BENGALURU] European stocks clocked their fifth straight week of gains on Friday with investors buying into the oil and gas and banking sectors, and Danish pharmaceutical company Novo Nordisk rising after US approval of its oral diabetes drug.
Investors also sought refuge in the so-called defensive sectors such as utilities, real-estate and food and beverages ahead of a week packed with economic data.
The United Nations (UN) general assembly will also provide clues on the fallout from attacks on Saudi oil facilities last weekend and indications of a potential meeting between the Presidents of Iran and the United States.
“After (the UN general assembly) things may become more uncertain, so that could explain the moves into defensive stocks,” said Teeuwe Mevissen, senior market economist at Rabobank.
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“Markets are basically keeping their gunpowder dry for afterwards when there is certainty about where things are headed.”
The pan-European STOXX 600 index closed up 0.3 per cent in a volatile session, taking weekly gains to 0.3 per cent.
Novo Nordisk rose 2.6 per cent after the US Food and Drug Administration approved an oral version of its diabetes drug, semaglutide.
Global equity markets were spooked at the start of the week by the Saudi attacks that sent oil prices soaring and fanned geopolitical concerns. But cues of further monetary stimulus by central banks around the world calmed investor nerves later in the week.
The oil and gas sector gained 3.4 per cent in the week – its biggest weekly increase in four months.
Retailers also led the benchmark STOXX 600 higher, with shares of Casino up 3.8 per cent after the debt-laden company said it was in talks to sell its discount store chain, Leader Price, to German rival Aldi.
Friday’s volatility also stemmed from “quadruple witching”, where investors unwound positions in futures and options contracts before they expired.
In the week ahead, investors will also be watching for economic data from the euro zone and the United States, including preliminary PMIs and economic growth figures.
Shares in some of the biggest outperformers this year were weighing on the STOXX 600. Airbus, up 43 per cent so far this year, was down 3.2 per cent, and steady dividend-paying companies including Unilever and British American Tobacco were down at least 1.5 per cent.
The London-listed of these companies pushed the FTSE 100 down 0.2 per cent. It ended the week 0.3 per cent lower, breaking a three-week streak of gains.
The past few weeks saw investors rotate out of growth sectors and into value stocks, with beaten-down shares of banks in popular demand. However, the European banking index closed the week down 1 per cent as investors went back into the safety sectors.
Shares in Denmark’s Jyske Bank jumped 5.3 per cent to the top of the STOXX 600 after the lender said people with more than US$111,100 in their accounts would be charged a deposit rate as it seeks to pass on some of the costs of recent rate cuts by the European and Danish central banks.