Europe’s main stock markets ended the week in an upbeat mood yesterday, with London topping a new high, and prices on Wall Street modestly higher on the back of favourable results from banks.
“The FTSE 100 notched up another all-time high to round off a record-breaking week of gains,” said Jasper Lawler at London Capital Group.
London’s FTSE 100 climbed 0.6% to 7,337.81 points, Frankfurt’s DAX 30 was 0.9% up at 11,629.18 points,  Paris’ CAC 40 surged 1.2% at 4,922.49 points and the Euro Stoxx 50 was up 1.2% at 3,324.24 points at close.
A steady opening on Wall Street, buoyed by a spate of solid bank earnings reports, helped prop up the European markets as they headed into the weekend.
“Shares of UK-listed banks including Barclays, RBS and HSBC responded positively to the US results,” Lawler said.
Equities had retreated on Thursday on investor disappointment over a lack of policy detail from United States President-elect Donald Trump and allegations of emissions cheating at Fiat Chrysler.
“Trump’s first press conference was uninspiring, leaving intact all the uncertainty surrounding the course of the new administration,” said UniCredit analyst Marco Valli.
The FTSE’s record-breaking run has been driven by sterling weakness owing to ongoing uncertainty over Brexit.
Next Tuesday, British Prime Minister Theresa May will set out the long-awaited approach the government will take before triggering article 50, starting a two-year process that will take Britain out of the EU.
“If the Prime Minister confirms the UK will leave the single market in a ‘Hard Brexit’, the British pound could drop below 1.20 against the dollar,” LCG’s Lawler said.
In the eurozone, French investors appeared to take in their stride news that Renault is being investigated for possible emissions cheating as the so-called “dieselgate” scandal that engulfed German giant Volkswagen 18 months ago spread to other auto makers.
While Renault shares ended the day 2.9% lower, the overall French market rose by 1.2%.
Italian-American group Fiat Chrysler had been targeted by US authorities just the day before, but strenuously denied the accusations and said it was sticking to its earnings targets.
After plunging more than 16% on Thursday, Fiat Chrysler shares bounced back yesterday to show a gain of 4.6% at the close.
In New York, two major US banks — JPMorgan Chase and Bank of America — posted strong earnings last year, pushing up the wider market.
And with expected economic stimulus and tax cuts likely to bring interest rate increases from the Federal Reserve, banks are expected to see continued profitability this year.