European stock markets gave up the previous session’s gains on Friday despite news of the French, Spanish and Swedish economies beating growth expectations.
In London, the FTSE 100 (^FTSE) fell 0.6% after opening, with financials, real estate firms, and consumer non-cyclicals lower, while the French CAC (^FCHI) tumbled 0.2% and the DAX (^GDAXI) was 0.8% lower in Frankfurt.
France’s economy grew at its fastest pace in more than five decades, since 1969, last year as the country bounced back from the coronavirus pandemic quicker than expected.
GDP growth hit 7% in 2021 compared with an 8% contraction in 2020, when lockdowns hampered economic growth. Consumers helped the recovery, with household spending rising by 0.4% in the quarter following the relaxation of restrictions earlier in 2021.
Finance minister Brune Le Maire told French radio: “The French economy has rebounded spectacularly and that’s erased the economic crisis. There are still some sectors that are still having trouble, like tourism and hotels, but most are recovering very strongly and that’s creating jobs.”
Meanwhile, Spanish GDP grew by 2% in the last quarter of 2021, better than the 1.4% growth expected, and the Swedish economy saw a growth of 1.4% during the final three months, also beating forecasts.
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Across the pond, S&P 500 futures (ES=F) were up 0.3%, Dow futures (YM=F) rose 0.2%, and Nasdaq futures (NQ=F) were 0.7% higher as trade began in Europe.
“While markets in the US have been swinging wildly between positive and negative territory, as investors there try and make sense of the Federal Reserve’s intentions, it’s important to note that we haven’t broken below the lows that we put in on Monday,” Michael Hewson of CMC Markets said.
Apple (AAPL) stock was up 5% in pre-market trading after it posted record sales of $124bn (£93bn) despite the global chip shortage. Profits were also up 20% to an all-time high of $34.6bn.
Meanwhile, US GDP expanded by 5.7% during 2021, the best annual growth since 1984. This was driven by government and central bank stimulus, and vaccine rollouts.
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Asian markets were mixed on Friday, at the end of a broadly damaging week for global investors as the Federal Reserve gave notice that the days of ultra-cheap cash were coming to an end quicker than initially thought.
Some bargain-buying provided support in Japan after Thursday’s steep drops, with the Nikkei (^N225) climbing 2% on the day.
In Hong Kong, the Hang Seng (^HSI) fell 1% and the Shanghai Composite (000001.SS) also dipped almost 1% during the session.
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