European stock markets experienced a positive boost on Friday, with stronger-than-expected U.K. growth data contributing to the overall positive sentiment. The German DAX traded 0.4% higher, the French CAC 40 was up by 0.5%, and the U.K.’s FTSE 100 climbed 0.4%.
The positive outlook was further supported by hopes for rate cuts by the U.S. Federal Reserve. Data released on Friday revealed that Britain’s economy grew by 0.6% in the first quarter of 2024, surpassing expectations of 0.4%. This growth ended the shallow recession that the country had entered in the second half of the previous year. In March alone, the economy expanded by 0.4%, exceeding the projected 0.1% growth.
The Bank of England maintained interest rates at a 16-year high on Thursday, but two committee members voted in favor of a rate cut, indicating a potential shift towards lowering interest rates. Market traders are now estimating a 45% likelihood of a rate cut at the next policy meeting, with easing measures priced in for the rest of the year.
IAG stock rose by 2% following the airline group’s report of a significant increase in operating profit for the first quarter. The parent company of British Airways, Iberia, and Aer Lingus also reported a substantial rise in revenue and expressed confidence in its readiness for the upcoming peak summer travel season.
In the energy sector, crude prices saw an increase on Friday, with both U.S. and China showing higher demand for oil. By early trading, crude futures were up by 0.9% and 0.7% respectively, on track to record a weekly gain after previous losses. Positive import data from China, coupled with a decrease in U.S. inventories, indicated a potential improvement in global oil demand.
Gold prices also saw an uptick, rising by 1.5%, while the euro remained steady against the dollar. Overall, the market outlook for the week remained positive, with various sectors showing signs of growth and stability.