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Home>UPDATE: European stocks ring up best month of 2017

UPDATE: European stocks ring up best month of 2017

UPDATE: European stocks ring up best month of 2017


By Sara Sjolin, MarketWatch

Volkswagen slides after announcing EUR2.5 billion in charges

European stocks advanced on Friday, booking the best month of the year after a string of upbeat data and a rally for the banking sector on rising expectations for tighter monetary policy.

The Stoxx Europe 600 index rose 0.5% to 388.16, and registering its highest monthly advance, up 3.8%, since December 2016. The index has risen for three straight weeks, and ended the quarter with a return of 2.3%, rebounding from a 0.5% loss in the second quarter.

"The overall recovery in the euro area is going from strength to strength at a time when people are increasingly optimistic about the global economy. Companies [earnings] also had a good second quarter and people seem optimistic about the third and beyond," said Craig Erlam, senior market analyst at Oanda.

He cautioned, however, there are still a number of things that could go wrong, including the U.K.-EU Brexit negotiations and a fragile recovery in southern Europe.

"But we finally appear to be at a point when the tailwinds are more encouraging that the headwinds are concerning and this could continue to support stocks even as the ECB withdraws it's support, which in itself is an act of confidence in the outlook," Erlam added.

Indexes: Germany's DAX index closed 1% higher at 12,828.86 on Friday, posting a 6.4% monthly gain--its best monthly gain of the year. The gauge booked a quarterly rise of 4.1%, representing its fifth straight quarterly increase.

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