European Stocks Close Higher As UK Reverses Fiscal Plan

(RTTNews) - European stocks closed higher on Friday, extending gains from the previous session, amid hopes that U.S. inflation may have peaked and would start trending lower in the coming months.

Markets also reacted positively to the British government announcing a U-turn on certain elements of its controversial fiscal policies.

British Prime Minister Liz Truzz, who sacked finance minister Kwasi Kwarteng, announced a reversal of some tax-cutting plans laid out in a mini-budget last month.

The pan European Stoxx 600 gained 0.56%. The U.K.'s FTSE 100 edged up 0.12%, Germany's DAX climbed 0.67% and France's CAC 40 surged 0.9%, while Switzerland's SMI gained about 1%. The FTSE 100 shed nearly 2% in the week, while CAC 40 and DAX both gained more than 1%.

Among other markets in Europe, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Poland, Portugal, Spain, Sweden and Turkiye ended notably higher.

Austria closed modestly higher, while Netherlands, Norway and Russia ended weak.

In the UK market, Ocado Group rallied nearly 5%. Segro gained 3.9% and Unite Group surged nearly 3%. Rentokil Initial, United Utilities, Centrica, B&M European Value Retail, F&C Investment Trust, RightMove, Severn Trent and Mondi gained 2 to 2.7%.

Harbour Energy shed about 5%. Fresnillo, BAE Systems, Rio Tinto, Prudential, Anglo American Plc, Standard Chartered and Shell also ended notably lower.

Royal Mail shares slumped more than 11%. The postal service expects operating loss of about £350m in year to end of March, which could rise to £450m.

In Paris, Essilor, Veolia, Unibail Rodamco, AXA, Air France-KLM, L'Oreal, Pernod Ricard, Engie, Hermes International and Faurecia gained 1.6 to 3.2%. Teleperformance, BNP Paribas, LVMH and Credit Agricole also posted strong gains.

Thales ended lower by about 2.1%. STMicroElectronics, Atos, Schneider Electric and ArcelorMittal lost 1 to 1.6%.

In the German market, Vonovia climbed more than 6.5%. Deutsche Wohnen surged 5.2%, while E.ON, Deutsche Bank, Merck, SAP, Symrise, Siemens Healthineers and Deutsche Telekom gained 1.5 to 3.25%.

Bayer, Infineon Technologies and Siemens lost 1 to 1.6%. Fresenius and Brenntag closed modestly lower.

In the Swiss market, shares of banking software firm Temenos plummeted 19% after slashing its 2022 guidance.

On the economic front, Germany's wholesale price inflation accelerated for the first time in five months in September, climbing 19.9% year-over-year, data from Destatis showed. That was faster than the 18.9% spike in August.

On a monthly basis, wholesale prices rose 1.6% from August, when they edged up by 0.1%.

France's consumer price inflation slowed to 5.6% in September as initially estimated, from 5.9% in August, data from the statistical office showed.

The euro area trade gap widened for the third straight month in August amid a faster rise in imports than exports, data from Eurostat showed.

The seasonally adjusted trade deficit rose to EUR 47.3 billion in August from EUR 40.5 billion in July.

Both exports and imports rose by 3.5% and 5.5%, respectively, in August from a month ago.

On an unadjusted basis, the trade balance showed a deficit of EUR 50.9 billion compared to a surplus of EUR 2.8 billion in the previous year.