European shares started the final session of the week in positive mood on the back of higher Asian markets and despite a signal from the European Central Bank that it would taper asset purchases.
The pan-European STOXX 600 index was up 0.26% in early deals with all major regional bourses higher. Investors were digesting the ECB’s decision on Thursday to slow down bond buying under its pandemic emergency purchase programme in response to higher inflation and stronger GDP growth across the euro zone. The ECB also modestly revised up its medium-term inflation forecasts.
In the UK, GDP growth slowed in July to 0.1%, against expectations of a rise of 0.6%.
“Despite the fact that the month marked the time when most social restrictions were lifted, the well reported headwinds of disruptions to supply chains, staff shortages and even rising Covid-19 case numbers in some regions limited the gains,” said interactive investor head of markets Richard Hunter.
“As such, the UK economy remains a work in progress, with news of tax hikes earlier in the week playing against previous investor optimism with its threat of crimping both corporate profits and consumer sentiment.”
In a quiet day of equity news Swedish property firm Samhällsbyggnadsbolaget climbed 2.51% after starting a new apartment project.
French luxury goods maker LVMH gained 2% after HSBC recommended buying the stock, while Fresenius Medical Care dropped 3.3% after JP Morgan cut rating on the stock to “underweight”.
