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Europe close: Stocks boosted by 'bittersweet' Q3 euro area GDP data

By Alexander Bueso

Date: Friday 30 Oct 2020

Europe close: Stocks boosted by 'bittersweet' Q3 euro area GDP data

(Sharecast News) - European stocks finished the session mostly higher after what one economist termed a "bittersweet" print on third quarter Eurozone gross domestic product.
Economic activity in the single currency bloc shot back at a quarter-on-quarter pace of 12.7%, nearly undoing the prior quarter's 11.8% drop and coming in well ahead of the 9.4% rebound anticipated by the consensus.

But the reimposition of Covid-19 lockdowns meant that fourth quarter GDP growth was now almost certain to undershoot the expectations built up in markets until just a few weeks ago.

The pan-European Stoxx 600 wavered between gains and losses but ended the day up by 0.18% to 342.36, and while the German DAX dipped 0.36% to 11,556.48, all of the Continent's other major stockmarket indices ended the session on the front foot.

Friday's strong GDP reading pushed the year-on-year rate of contraction in the euro area economy from -14.8% for the three months to June to a less dire -4.3% (consensus: -7.0%).

Across the Pond, Wall Street's main indices were moving lower as investors reacted poorly to what were generally better-than-expected quarterly financials from several of the country's tech giants, including Alphabet, Amazon, Apple and Facebook.

"Better GDP figures might be helping this eurozone outperformance, but it is more likely due to a grateful realisation that even if Q4 is absolutely dire, the ECB will be along in due course with some form of rescue programme," said IG chief market analyst Chris Beauchamp.

In equity news Ubisoft shares fell 7.5% after the computer games maker announced delays for its Far Cry 6 and Rainbow 6 Quarantine releases.

Shares of Air France-KLM edged up after the airline swung to a heavy net loss in its third quarter, as it cut its capacity views and warned that it would see significantly lower earnings for the last three months of the year.

Stock in Belgian telephone, internet and television service provider Proximus jumped after the firm upgraded its full-year guidance, citing a good response to its launch of flexible packages in July.

The new offer, which allows customers to create their own packages of mobile, internet and TV services, lifted the company's client base excluding pre-pay customers by 3.7% year on year.

Natwest shares rebounded by over 6% after the state-owned lender produced forecast-busting profits for the third quarter and cut bad debt provisions.

Royal Dutch Shell was boosted by an upgrade to 'equalweight' at Barclays.

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