6:30 PM Frankfurt – Markets across Europe register best weekly gain in 2014 after investors returned to add stocks on hopes of receding tensions between Russia and Europe. However, most nations struggled to expand economy in the second quarter and the much expected recovery is likely to be delayed several quarters.
European market indexes advanced on the expectations of central bank action after the latest economic data showed weakness across the euro zone.
Germany and Italy contracted 0.2% in the second quarter from the first and France stagnated, according to the latest data released by the Eurostat.
Across the entire euro zone of 18-nations, economy stagnated in the second quarter on a quarterly basis and rose 0.2% from a year ago quarter.
Expectations in the current quarter are also weak after European political leaders opted to impose sanctions on Russia and economy in the currency union remain mired in recession that is now in the sixth year.
Weakness in the Eurozone is a concern to manufacturers around the world as China is engineering soft landing and shrink credit, curb construction speculation; and Japan’s economy shrank 6.8% annual rate in the second quarter.
Economists are likely to revise the 2% estimate of growth in the euro zone after the latest batch of economic data. The economy in the currency union contracted 0.4% in 2013.
However, economy in the euro zone has been uneven. Cyprus and Greece are edging towards halting the contraction after a deep plunge in the last three years and Spain grew 0.6% on a quarterly basis.
Portugal, though small compared to other nations also returned to growth and healthier economies of Sweden and the Netherlands expanded after contracting in the first quarter.
European investors bid up stocks this week after positive comments from Russian President Putin.
DAX Index in Frankfurt gained 3.2% in the week after plunging 10% by August 8 from its record high in July. ASE Index in Greece rebounded 6.4% after dropping to a low on Aug 8 since October.