September 20, 2019 / 7:44 AM / 2 days ago

European shares log fifth week of gains, Novo Nordisk shines

(Reuters) - European stocks clocked their fifth straight week of gains on Friday with investors buying into the oil and gas and banking sectors, and Novo Nordisk rising after U.S. approval of its oral diabetes drug.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 20, 2019. REUTERS/Staff

Investors also sought refuge in the so-called defensive sectors such as utilities .SX6P, real-estate .SX86P and food and beverages .SX3P ahead of a week packed with economic data.

The United Nations (UN) general assembly will also provide clues on the fallout from attacks on Saudi oil facilities last weekend and indications of a potential meeting between the presidents of Iran and the United States.

“After (the general assembly) things may become more uncertain, so that could explain the moves into defensive stocks,” said Teeuwe Mevissen, senior market economist at Rabobank.

“Markets are basically keeping their gunpowder dry for afterwards when there is certainty about where things are headed.”

The pan-European STOXX 600 index closed up 0.3% in a volatile session, taking weekly gains to 0.3%.

Novo Nordisk (NOVOb.CO) rose 2.6% after the U.S. Food and Drug Administration approved an oral version of its diabetes drug, semaglutide.

Global equity markets were spooked at the start of the week by the Saudi attacks that sent oil prices soaring and fanned geopolitical concerns. But cues of further monetary stimulus by central banks around the world calmed investor nerves later in the week.

The oil and gas sector .SXEP gained 3.4% in the week - its biggest weekly increase in four months. [O/R]

Retailers also led the benchmark STOXX 600 higher, with shares of Casino (CASP.PA) up 3.8% after the debt-laden company said it was in talks to sell its discount store chain, Leader Price, to German rival Aldi.

Friday’s volatility also stemmed from “quadruple witching”, where investors unwound positions in futures and options contracts before they expired.

In the week ahead, investors will also be watching for economic data from the euro zone and the United States, including preliminary PMIs and economic growth figures.

Shares in some of the biggest outperformers this year were weighing on the STOXX 600. Airbus (AIR.PA), up 43% so far this year, was down 3.2%, and steady dividend-paying companies including Unilever (ULVR.L) and British American Tobacco (BATS.L) were down at least 1.5%.

The London-listed of these companies pushed the FTSE 100 .FTSE down 0.2%. It ended the week 0.3% lower, breaking a three-week streak of gains.

The past few weeks saw investors rotate out of growth sectors and into value stocks, with beaten-down shares of banks in popular demand. However, the European banking index .SX7P closed the week down 1% as investors went back into the safety sectors.

Shares in Denmark’s Jyske Bank (JYSK.CO) jumped 5.3% to the top of the STOXX 600 after the lender said people with more than $111,100 in their accounts would be charged a deposit rate as it seeks to pass on some of the costs of recent rate cuts by the European and Danish central banks.

Reporting by Susan Mathew and Sruthi Shankar in Bengaluru; Editing by Pravin Char

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