(Bloomberg) -- European equities fluctuated on Friday as investors weighed improving economic data and Germany's backing of European Central Bank policy against an acceleration in coronavirus infections in the U.S.
The Stoxx Europe 600 Index was little changed as of 10:06 a.m in London, after rising as much as 0.3% and dropping 0.1%. Banks, insurers and oil and gas were the biggest drags on the market, while technology and retail outperformed. The regional benchmark is up 2.7% since Monday, headed for its best week since June 19. Lower volumes are expected, with U.S. markets closed for Independence Day.
Purchasing Manager Indexes from the euro area, Germany and the U.K. came in ahead of expectations. Although the euro-area economy should grow again in the third quarter, weak demand and mounting job cuts will likely curtail the recovery. Separately, France was preparing for a government reshuffle after the resignation of Prime Minister Edouard Philippe.
“The open question is which path is embedded in the stock market,” Nordea Investment Funds macro strategist Sebastien Galy wrote in a note. “The Eurostoxx Cyclical index recovered half of its value since the Covid-19 crisis, having suffered a tiny fraction of the shock of the Great Financial Crisis that suggests a more rapid pace of recovery than is likely.”
Stronger-than-anticipated U.S. job data this week, as well as improving manufacturing gauges in the U.S. and China have helped to mitigate investors' concerns over the record numbers of new coronavirus cases in several American states.
“Whereas the market dynamics was negatively impacted by the Covid-19 pandemic re-acceleration in the U.S., the strong performance of the jobs market came as a soothing balm,” Oddo BHF strategist Sylvain Goyon said by phone. “In Europe, the simultaneous Bundestag backing of the ECB policy and the beginning of the German EU presidency is boding well for fruitful discussions about the EU recovery plan.”
Among notable movers, Delivery Hero SE climbed to a fresh record after order numbers in the second quarter rose 94% against the same period last year, while UBI Banca rose after reports suitor Intesa Sanpaolo SpA may be considering improving its takeover offer.
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