(Reuters) -European shares edged up on Friday and were set for weekly gains as markets priced in the likelihood of an imminent interest rate cut by the U.S. Federal Reserve, while investors also braced for Fitch’s credit rating verdict on France later in the day.
The pan-European STOXX 600 rose 0.1% to 556 points, as of 0714 GMT, and was set for its first weekly rise in three. Market participants cemented expectations that the Fed will likely deliver its first interest rate cut of the year next week to shore up the domestic labour market.
Among sectors, aerospace and defence was marginally higher, and was on track for its largest weekly rise in over four months, gaining 5.4% so far. Simmering geopolitical tensions, after Poland shot down a possible Russian drone, sparked a rally in the defence sector this week.
Swiss pharmaceutical company Novartis lost 2% after Goldman Sachs downgraded the stock to “sell” from “neutral”, citing rising competition from generics.
The broader healthcare sector lost 0.3%.
Later in the day, focus will be on Fitch’s rating review of French credit, with market participants bracing for a potential downgrade. The country’s president, Emmanuel Macron, appointed its fifth prime minister in under two years earlier this week at a time when recent local governments have struggled to unite over plans for debt-fuelled fiscal spending.
(Reporting by Tristan Veyet in Gdansk, Johann M Cherian in Bengaluru; Editing by Eileen Soreng)
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