European stocks were headed for their best weekly performance in seven months on Friday, as a bright start to the earnings season helped ease investor concerns about higher inflation, according to Reuters.
The pan-European STOXX 600 index rose 0.3%, on course to end the week with a more than 2% gain after a sharp rebound in risk appetite in the past two sessions.
Banks were the top gainers in Europe, up 1.4%, after forecast-beating quarterly results on Thursday from four of Wall Street’s biggest lenders on an economic rebound and deals bonanza.
Retailers, oil & gas and travel all rose between 0.9% and 1.1%, while defensive utilities fell the most.
While European banks are trading near pre-pandemic highs, U.S. banks have surged to record highs recently.
European earnings kicks into high gear in the next few weeks, with analysts expecting a near 47% jump in third-quarter profit for companies listed on STOXX 600, as per Refinitiv IBES data. Energy and industrial companies are forecast to provide the biggest boost to the earnings performance.
Europe’s inflation upswing is still seen as temporary and there are no signs yet that the recent surge is becoming embedded in wages, European Central Bank President Christine Lagarde said on Thursday.
Investors have fretted over rising inflation caused by a global energy crisis, supply-chain bottlenecks and labour shortages slowing a corporate profit rebound from the pandemic shock.