By Peter Nurse
Investing.com - European stock markets traded higher Friday, ending a volatile week on a positive note as investors continued to digest the prospect of tighter monetary policy, more sanctions on Russia, and potential French political turmoil.
By 3:50 AM ET (0750 GMT), the DAX in Germany traded 1.4% higher, the CAC 40 in France rose 1.5% and U.K.’s FTSE 100 climbed 1%.
Despite these gains, European equity markets are set to end the week largely lower, with the DAX down around 1.2% so far, the CAC 40 down 1.9%, and the blue Euro Stoxx 50 index 1.6% weaker.
The prospect of aggressive global rate hikes has rattled investors this week, with the U.S. Federal Reserve signaling that it was prepared to act more quickly than previously guided to contain rampant inflation.
The policymakers at the European Central Bank were not as hawkish, but still appeared keen to unwind stimulus, according to the accounts of their March meeting, released Thursday.
Elsewhere, the war in Ukraine continues, with the United Nations General Assembly suspending Russia from the U.N. Human Rights Council over allegations of atrocities against Ukrainian civilians, something denied by Moscow.
The U.S. Congress also removed its "most favored nation" trade status, and the European Union agreed to ban coal imports, the first time that sanctions have targeted Russia’s crucial energy revenues.
Also on the radar is the risk of a political upset in France, with far-right leader Marine Le Pen very close to incumbent Emmanuel Macron in the opinion polls ahead of Sunday’s first round of the French presidential election.
In corporate news, Volvo (ST:VOLVb) stock fell 1% after the Swedish truck maker set aside provisions of 4 billion crowns ($423.2 million), expecting its first quarter operating income to take a hit from uncertainty caused by the Russia-Ukraine war.
Banco Bpm (MI:BAMI) stock surged over 14% after French bank Credit Agricole SA (PA:CAGR), up 0.7%, said it has bought a 9.2% stake in Italy's third-largest lender.
Oil prices edged higher Friday but are still heading for weekly losses of around 3%, weighed by the decision of a number of major consuming nations to release massive amounts of crude from emergency reserves as well as China’s worsening demand outlook as its COVID outbreak persists.
International Energy Agency member countries announced earlier this week that they would release 60 million barrels of oil, adding to the 180 million barrel release announced by the United States last week, while China’s COVID-19 outbreak appears to be worsening, with new case numbers topping 21,000 on Thursday.
By 3:50 AM ET, U.S. crude futures traded 0.8% higher at $96.84 a barrel, on course for a loss of 3% this week, while the Brent contract rose 0.7% to $101.30, down 3.5% so far this week.
Additionally, gold futures fell 0.3% to $1,932.20/oz, while EUR/USD traded 0.2% lower at 1.0858.