European shares close at record levels while Glencore jumps on Rio Tinto rates

European shares closed at a record high on Friday, driven by a surge in Glencore that helped the STOXX 600 hit its longest weekly winning streak since May. After two consecutive losing sessions, the recovery underlined investors’ resilience, even as a string of weak gains and renewed geopolitical tensions fueled by US actions in Venezuela weighed on sentiment. Glencore rose 10%, while Rio Tinto fell 2.6%. Rio said Thursday there are early talks to buy Glencore, a deal that would create the world’s largest mining company.

The gain in Glencore sent the STOXX 600 index up 1%.

TSMC RESULTS BOOST CHIPS OUTLOOK

Technology stocks led the STOXX 600’s advance that day, posting their best week in almost two years.

Dutch chip equipment maker ASML added 6.8% and was the biggest gainer in the technology index after HSBC raised its price target for the stock.

Germany’s Infineon rose 2.4%, while STMicroelectronics added 2.9%.

Tech stocks also got a boost after upbeat fourth-quarter results from TSMC, the world’s largest contract chipmaker.

Shares in Anglo American rose 2.7%, a day after a European Commission filing showed the miner’s deal with Canada’s Teck Resources is headed for approval by competition authorities in Europe.Defense stocks rose weekly, gaining almost 10% – their best performance since November 2020 – after US President Donald Trump called for higher defense spending.

Global market sentiment also got a boost as investors reexamined the US labor market – an increasingly important gauge of the Federal Reserve and appetite for riskier assets.

The latest nonfarm payrolls report pointed to a slowdown in job growth, but a drop in unemployment reinforced expectations that the Fed will hold rates steady at its January meeting.

“Most of the US economy is in the process of cutting employment, pointing to further work for the Federal Reserve. Still, the fall in unemployment and a likely ‘hot’ inflation next week suggest no action will be taken before March,” said James Knightley, chief global economist at ING.

The retail route continued from the previous session. Pandora warned of weaker sales growth in 2025, sending the jewelry maker’s shares down 13%.

Sainsbury’s reported a decline in general merchandise and clothing sales for the Christmas quarter, with the supermarket group’s shares falling 5.3%.

On the trade front, European Union member states have confirmed that a large majority of them support a planned free trade deal with South American bloc Mercosur.