European Equity Benchmarks Close Sharply Higher Boosted by Broad Market Rally

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The major European indices closed sharply higher in Friday thanks to a broad market rally that ended a volatile week of trading.

In economic news, the inflation rate in Germany as measured by the consumer price index is expected to be 1.7% in December, according to the Federal Statistical Office (Destatis). Compared with November 2018, consumer prices are expected to increase by 0.1%. On an annual average, the inflation rate is expected to be 1.9% in 2018.

Destatis also reported that the harmonized index of consumer prices for Germany, which is calculated for European purposes, is expected to increase 1.7% in December year on year, and 0.3% compared with November. On an annual average, the harmonized index of consumer prices is expected to increase 1.9% in 2018 compared with 2017.

In Spain, the annual inflation of the CPI in December was 1.2%, according to the flash estimate issued by the Spanish Statistical Institute (INE). This indicator provides a preview of the CPI that, if confirmed, would imply a decrease of five tenths in the annual rate, since in November the change was 1.7%. INE attributed the decrease to a drop in the prices of fuels, particularly diesel and gasoline. INE also reported that consumer prices registered a variation of -0.4% in December compared with the previous month.

And in Russia, December data indicated a moderate improvement in the health of the manufacturing sector, and the third strongest overall expansion in 2018, according to IHS Markit. Growth was supported by upturns in production and new business.

"Encouragingly, business confidence picked up further in December," said Sian Jones, an economist at IHS Markit. "Robust optimism stemmed from greater access to new foreign markets and a sustained rise in new business, which manufacturers expect to see continuing through 2019. Consequently, firms expanded their workforces at a moderate rate."

In equities, tobacco and consumer goods company British American Tobacco, and energy services firm John Wood Group led the FTSE sharply higher, rising 4.3% each, followed by Legal and General Group, and turnaround firm Melrose Industries, which climbed 4.2% and 4.1%. Royal Bank of Scotland was up 3.9%, while airline operator easyJet, and mining company Evraz each closed 3.7% higher.

In Frankfurt, internet company Wirecard led the DAX into positive territory, rising 4.3%, followed by industrial gases company Linde, and semiconductor company Infineon, which were up 3.4% each. Deutsche Bank climbed 3.2%, while electricity and natural gas provider RWE, and adhesives manufacturer Covestro were up 2.6% and 2.5% respectively. Pharmaceutical company Bayer, and reinsurance firm Munich Re gained 2.4% and 2.3%.

In Paris, oilfield services company TechnipFMC rose 3.3%, followed by IT company Atos, luxury goods company Kering, and semiconductor company STMicroelectronics, each of which closed 3.1% higher. Construction materials supplier Saint Gobain, and auto parts supplier Valeo climbed 3% and 2.9%, followed by bank Credit Agricole, and industrial group Legrand, which were up 2.5% each.

The FTSE climbed 2.27%, the DAX rose 1.71%, and the CAC-40 gained 1.74%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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