NEW YORK CITY: Global stocks proved resilient Friday despite disappointing second-quarter economic growth in Europe and the United States and an underwhelming stimulus package from the Bank of Japan.
Official US data estimated growth in the second quarter at an annual rate of 1.2 percent, far below the 2.6 percent expected by analysts. The report showed weak investment by private businesses, offset somewhat by solid household consumption.
For the 19-nation eurozone, the European Union reported growth slowed sharply to a tepid 0.3 percent pace in the second quarter. Some analysts warned the surprise British vote to leave the European Union in June could further crimp growth in the second half of the year.
Still, Frankfurt and Paris both ended the day higher, while US stocks finished mostly in the black following strong earnings reports from Amazon and Google parent Alphabet.
US stocks stand near record highs, in part due to easy-money policies enacted by the US Federal Reserve and other central banks.
“We’re basically at all-time highs, but the market is evaluating whether there is reason to break out another leg higher,” said David Levy, portfolio manager at Republic Wealth Advisors.
London edged out a small gain as oil prices bounced off three-month lows struck earlier in the day.
The Nikkei climbed 0.6 percent after the Band of Japan opted against expanding its bond-buying stimulus program in favor of a package to double purchases of exchange-traded funds to about six trillion yen annually, and to inflate a US dollar lending program for Japanese firms doing business overseas.
The move disappointed many equity-market watchers. However, banks were big winners as the BoJ decided against slashing interest rates further. Japan’s lenders have complained that the BoJ’s negative rate policy is squeezing their margins.
Mitsubishi UFJ Financial Group’s shares surged 7.7 percent, rival Sumitomo Mitsui Financial Group jumped 7.8 percent and brokerage Nomura Holdings 12.5.
“Markets may be disappointed that the Bank of Japan did not deliver more stimulus overnight… but financials are clearly relieved that it didn’t take interest rates further negative,” said analyst Mike van Dulken at traders Accendo Markets.
The yen rocketed higher, with the dollar falling 3.1 percent to 102.07 yen.
Italy’s Banca Monte dei Paschi di Siena came a distant last in EU bank stress test results released late Friday that showed the sector as a whole was broadly resilient.
The announcement came shortly after BMPS’s board announced a rescue plan for shifting the billions of euros in bad loans that have weighed on the embattled lender.
Some analysts fear that the bank’s bad debts may trigger a banking crisis in Italy and eurozone turmoil.
US oil giant ExxonMobil fell 1.4 percent after reporting a nearly 60 percent plunge in second-quarter earnings to $1.7 billion due to low oil prices and weak refining margins.
China’s Baidu, which is listed in New York, dropped 3.6 percent after second-quarter profits tumbled 34 percent to 2.4 billion yuan ($363.2 million) as a scandal over its policies for displaying paid ads cut into customer growth.
Key figures around 2100 GMT
New York – DOW: DOWN 0.1 percent at 18,432.24 (close)
New York – S&P 500: UP 0.2 percent at 2,173.60 (close)
New York – Nasdaq: UP 0.1 percent at 5,162.13 (close)
London – FTSE 100: UP 0.1 percent at 6,724.43 (close)
Frankfurt – DAX 30: UP 0.6 percent at 10,337.50 (close)
Paris – CAC 40: UP 0.4 percent at 4,439.81 (close)
EURO STOXX 50: UP 0.8 percent at 2,990.76 (close)
Tokyo – Nikkei 225: UP 0.6 percent at 16,569.27 (close)
Hong Kong – Hang Seng: DOWN 1.3 percent at 21,891.37 (close)
Shanghai – Composite: DOWN 0.5 percent at 2,979.34 (close)
Euro/dollar: UP at $1.1177 from $1.1076 late Thursday
Pound/dollar: UP at $1.3223 from $1.3166
Dollar/yen: DOWN at 102.08 yen from 105.32 yen