Positive economic data provided a boost to the dollar and helped steady Chinese stocks. Safe havens such as gold which have rallied recently fall back.
London stocks ended the week on a high as oil prices rebounded, US fourth quarter economic growth data was revised higher and China’s central bank hinted at further stimulus.
Oil prices reversed the previous day’s declines as traders closed short positions, with Brent crude rising 3.4% to $36.56.
Another lift to equities came from the Commerce Department’s second estimate of US gross domestic product growth for the fourth quarter was revised to an annualised 1% from an initial 0.7%, surprising analysts who had expected a 0.4% increase.
Separately the Commerce Department said US personal spending rose 0.5% in January, beating economists’ expectations for a 0.3% increase. Personal spending had advanced 0.1% in December.
The University of Michigan’s final estimate on its US consumer sentiment index for February was revised to 91.7 from a preliminary reading of 90.7. It was below last month’s final reading of 92.0 but a touch ahead of analysts’ expectations for a print of 91.0.
Meanwhile, the People’s Bank of China Governor Zhou Xiaochuan said there were more tools in the central bank’s policy to help turnaround the nation’s economic slowdown. His remarks were seen by analysts to suggest that more stimulus may be on the cards.
At home, investors shrugged off a worse-than-expected survey from GfK on UK consumer confidence. The index measuring sentiment fell to 0 in February from 4 in January, missing analysts’ estimates of 3.
Economic confidence in the Eurozone was also in the dumps last month. The European Commission’s headline economic sentiment indicator fell to 103.8 from a revised 105.1 in January. This was below economists’ expectations for a reading of 104.4 and marked the lowest reading since June 2015.
Gold which reached a one year high of $1,260 a couple of weeks ago as the recent bout of investor nerves reached a peak, was down $6 over the week to settle at $1,221 an ounce.