By Peter Nurse
Investing.com - European stock markets traded higher Friday, helped by gains in the airlines sector on hopes Covid-19 restrictions may be ending, although concerns surrounding China, one of the world’s main growth drivers, remain.
At 3:35 AM ET (0735 GMT), the DAX in Germany traded 0.6% higher, the CAC 40 in France rose 0.9% and the U.K.’s FTSE 100 climbed 0.3%.
British policymakers are set to consider easing England's Covid-19 rules for international travel Friday, allowing those who are fully vaccinated more freedom.
The travel industry, hard hit by the pandemic, has been calling for such a move for some time, and airline stocks have responded positively. IAG (LON:ICAG), the owner of British Airways, stock rose 3.8%, Air France KLM (OTC:AFLYY) stock rose 1.6% and budget airline Ryanair (LON:RYA) stock climbed 1.8%.
Elsewhere, Renault (PA:RENA) stock rose 0.4% after the French auto giant announced late Thursday that it would cut up to 2,000 engineering and support jobs in France as it shifts into electric cars and hires in different positions.
Staying with corporate news, S4 Capital (LON:SFOR) stock rose 0.5% after Martin Sorrell’s advertising agency agreed to acquire tech services group Zemoga, while Commerzbank (DE:CBKG) stock rose 4.2% following a report that U.S. private equity firm Cerberus is considering raising its stake in the German lender.
Elsewhere, U.K. retail sales surprisingly fell 0.9% on the month in August, a far weaker result than the gain of 0.5% expected, with consumers spending less at food stores and more on hospitality, services and motor fuel as the economy reopened.
The August consumer price index for the Eurozone is due later in the session, with the number expected to rise to 3.0% on an annual basis, a sharp rise from July’s 2.2%, and a full percentage point above the central bank’s target.
Chinese data earlier this week suggested growth in the world's second-largest economy will slow in the second half of this year, and this is occurring while Beijing increases its regulatory supervision on a variety of different sectors, also potentially weighing on growth.
The China slowdown angle was also visible in miners' share prices, with Anglo American (LON:AAL), Rio Tinto (NYSE:RIO) and BHP all falling in London after UBS cut its forecast for iron ore prices. Beijing earlier this week announced it will expand the list of cities included in its anti-pollution drive this winter, something likely to curb Chinese steel manufacturing further.
Adding to the concerns, the risk of markets turning disorderly in China grew as real estate giant China Evergrande Group (HK:3333) lurched closer to default, its stock falling 10% in the process.
Crude prices weakened Friday as supply slowly comes back online in the hurricane-hit U.S. Gulf of Mexico region, but losses are small as the recovery in output is still seen lagging demand.
As of Thursday, about 28% of Gulf crude production - over 510,000 barrels a day - remained offline, more than two weeks after Hurricane Ida hit.
By 3:35 AM ET, U.S. crude futures traded 0.4% lower at $72.25 a barrel, while the Brent contract fell 0.4% to $75.36. Both contracts are on course to post weekly gains of around 4%.
Additionally, gold futures rose 0.3% to $1,761.95/oz, while EUR/USD traded 0.1% higher at 1.1777.