US Treasury Secretary Janet Yellen restated the need to push as big a stimulus as possible, saying that doing too little was worse than doing something big
London (AFP) - European equities mostly advanced Friday, despite a gloomy survey which confirmed the coronavirus-hit eurozone was in recession, while London flattened owing to a strong pound.
Oil prices sank as some companies began slowly restarting operations in the US producer state of Texas, which saw its refineries hammered by a severe cold snap.
Bitcoin zoomed to a new peak at $52,917, extending this month’s record-breaking run as several big-name corporations embrace the world’s most popular cryptocurrency.
The eurozone’s economy is being hit hard by a new wave of lockdowns but the damage will be less severe than last year’s virus-induced crash, a key survey showed.
The closely watched PMI index compiled by IHS Markit rose to 48.1 points in February from 47.8 points in January, closer to the 50-point level which would have indicated growth
However, businesses also expressed confidence that vaccinations would open up the economy in the coming months, IHS Markit added.
- ‘Seen as a positive’ -
Markets shrugged off the data because a recession was already expected owing to Covid-19 restrictions, according to CMC Markets analyst David Madden.
“The eurozone (economy) contracted by 0.7 percent in the fourth quarter – and the first quarter is expected to be even worse on account of (coronavirus) restrictions, so a recession is priced in,” Madden told AFP.
“At the moment – if things do not get any worse – that is seen as a positive.”
In early afternoon deals, the Frankfurt stock market won 0.6 percent and Paris added 0.7 percent, as investors digested also upbeat German and French manufacturing figures.
“The PMIs made for interesting reading (but) Germany’s manufacturing sector is powering ahead – with the fastest expansion rate in three years,” Madden noted.
- Sterling tops $1.40 -
In Britain, London stocks turned flat, reversing initial gains, as the pound rose above $1.40 for the first time in almost three years.
Sterling breached the symbolic barrier for the first time since April 2018, reaching $1.4008.
The currency was propelled by a vaccination drive that has boosted economic recovery hopes and eclipsed news of a lockdown-driven slump in retail sales, dealers said.
A strong pound weighs on the share prices of London-listed multinationals that earn in dollars.
Asian equities meanwhile diverged Friday as the region mulled concerns that a longer-term global economic recovery could fuel inflationary pressures.
- Key figures around 1200 GMT -
London - FTSE 100: FLAT at 6,621.08 points
Frankfurt - DAX 30: UP 0.6 percent at 13,792.43
Paris - CAC 40: UP 0.7 percent at 5,766.91
EURO STOXX 50: UP 0.7 percent at 3,705.66
Tokyo - Nikkei 225: DOWN 0.7 percent at 30,017.92 (close)
Hong Kong - Hang Seng: UP 0.2 percent at 30,644.73 (close)
Shanghai - Composite: UP 0.6 percent at 3,696.17 (close)
New York - Dow: DOWN 0.4 percent at 31,493.34 (close)
Euro/dollar: UP at $1.2143 from $1.2092 at 2200 GMT
Pound/dollar: UP at $1.4002 from $1.3975
Euro/pound: UP at 86.72 pence from 86.53 pence
Dollar/yen: DOWN at 105.31 yen from 105.69 yen
Brent North Sea crude: DOWN 1.6 percent at $62.91 per barrel
West Texas Intermediate: DOWN 2.2 percent at $59.22