Ferrovial makes a solid advance

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European stocks ended the week lower as fears over a double-dip recession in the US held back gains.

The pan-European FTSE 300 Eurofirst index fell 0.3 per cent over the week to close at 1,026.25, although it closed 0.6 per cent higher on Friday. The index saw its lowest close for a month on Wednesday.

In spite of German data showing Europe’s biggest economy picking up this week, the mood of many investors in Europe failed to improve.

The week’s biggest loser was CRH, which collapsed 13.2 per cent. Other losers included Vedanta Resources, ASML Holding, Tullow Oil and Commerzbank.

But it was not all bad news as the Spanish building company Ferrovial, the week’s top performer, saw impressive gains of 8.3 per cent over the week. Hermès, Fresnillo, Gecina, Carlsberg and Old Mutual were also strong performers.

The week ended on a positive note as European stocks climbed for a second day in a row after better-than-expected downward revisions to US economic growth eased concerns that the world’s biggest economy could tip back into recession.

Ben Bernanke, the US Federal Reserve chairman, also gave investors hope as his closely watched speech in Jackson Hole, Wyoming, was not as gloomy as some had feared.

The best performing stock on Friday was Banca Monte dei Paschi di Siena, which rallied 5 per cent after the Italian lender more than tripled net income.

It forecast operating profit of at least €585m, up from a previous estimate of at least €560m, citing increased demand.

Individual country stock indices also climbed in all 18 western European markets on Friday except Luxembourg. The French CAC gained 0.9 per cent while Germany’s Dax advanced 0.6 per cent.

Ferrovial rose 2.8 per cent Friday after Canada Pension Plan Investment Board agreed to buy Intoll Group of Australia for A$3.44bn, gaining a 30 per cent stake in the 407 ETR highway near Toronto. Ferrovial’s Cintra division owns 53 per cent of the toll road.

Commerzbank fell 1.9 per cent after the German press said the bank planned to sell new shares as early as this autumn to pave the way for an exit by the German government. The company’s stock fell 6.7 per cent over the week.

Commerzbank may sell €5bn or more if the stock market can absorb it, newspapers reported, citing people close to chief executive Martin Blessing.

The UK’s Tullow Oil fell 4.3 per cent on Friday after it was reported that Uganda had cancelled one of the company’s exploration licences.

The stock lost 6.9 per cent over the week after warning of likely delays to its projects in Uganda because of a tax dispute.

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