European equity markets extended gains on Friday, tracking strong gains in the US as robust economic data increased risk appetite and boosted market sentiment. The CAC, DAX, IBEX and the London equity benchmark index gained between 0.4% and 1.44%, while the euro found some upside momentum and traded above 1.374 against the US dollar.
On the macroeconomic front, the release of the UK GDP was fairly in line with expectations after showing the UK economy grew by 0.7% in the Q4 of 2013.Furthermore, the Eurozone’s economic sentiment rose to 202.4 in March, beating analysts’ estimates. In the US, personal consumption increased by 0.2% in February, while the University of Michigan/Thomson Reuters survey showed market sentiment rose to 80.0 in March compared to 79.9 in February.
In London, mining and energy companies led the index higher following stronger base metals and crude oil prices. Glencoire, Antofagasta, Fresnillo and Anglo American surged between 1.48% and 2%. Furthermore, banks rebounded from yesterday’s losses as Standard Chartered, RBS and HSBC gained between 0.44% and 2.23%.
On the other hand, insurance companies posted heavy losses as FCA reported that it plans probe into life policies insurances. Resolution fell sharply by 7.12%, while Legal and General, Aviva and Prudential also posted heavy losses between 2.62% and 3.5%.
Next week sees the release of the German retail sales and Eurozone’s inflation data on Monday. March has been a fairly volatile month including nervous trading conditions following the political uncertainty in Ukraine. However, we received some fairly robust economic data from the US and Eurozone that has offset any heavy losses across the equity markets. In the meantime, the euro has rebounded strongly to test a high at 1.396 against the USD, showing improving economic conditions across the European economies.