Europe Markets

Europe ends sharply up on ECB stimulus hopes, oil jumps 7%


European stocks rallied on Friday to close sharply higher, buoyed by a recovery in oil prices and dovish remarks from the European Central Bank (ECB), which signaled further monetary easing as early as March.

The pan-European STOXX Europe 600 index closed up 3 percent provisionally, with all sectors having posted solid gains.

The FTSE 100 fell into bear market territory this week as oil prices collapsed but on Friday closed up 2.2 percent. France's CAC 40 soared 3.1 percent and the German DAX finished 2 percent higher.

Asian markets moved higher Friday following a positive performance in U.S. markets, a rebound in oil prices and the comments from the latest ECB policy meeting. The Nikkei 225 climbed to close almost 6 percent higher, with Chinese markets also posting solid gains. U.S. stocks traded higher Friday, helped by oil's bounce and hopes of stimulus in both the euro zone and Japan.

Nicos Anastasiades.
Turkey can play 'great role' in Cyprus reunification

All sectors traded in positive territory, with the basic resources and oil and gas sectors up 3 and 5 percent respectively, as oil prices rose above $30 a barrel again. Brent crude was up over 7 percent at Europe's close, hovering at $31.48, while U.S. crude also jumped around 7 percent to $31.61.

Oil and gas exploration company Tullow Oil topped the STOXX 600, up as much as 19 percent, before closing 14.4 percent up. Royal Dutch Shell was one of the FTSE's best performers, finishing over 5 percent. Miners were performing well during trade, however some leading miners came under pressure in the afternoon, including Rio Tinto and Glencore, which both closed lower. Anglo American tumbled over 8 percent.

At a press conference on Thursday afternoon, ECB President Mario Draghi said the bank will "review and possibly reconsider" its policy stance in March.

The bank left rates on hold, but in the face of heavy losses on financial markets since the start of the year, Draghi said it would not "surrender". He once again said the bank was willing to act on Friday morning, speaking at the World Economic Forum in Davos.

Anti-austerity party ready to back Spanish government

Markit released the closely watched euro zone Purchasing Managers Index (PMI) for January, which showed euro zone businesses had a disappointing start to 2016. The index fell to 53.5 from 54.3 last month.

In company news, Italian bank Banca Monte dei Paschi di Siena (BMPS) said it did not need a capital increase and stressed it had a very strong capital position. Reuters cited the bank's chairman as saying in Italian media that the bank was "actively" pursuing tie-up options both in Italy and abroad.

BMPS shares were as high as 10 percent, however came under sharp pressure in afternoon trade, down near 7 percent before closing 2.7 percent higher, following its shares being suspended. Many of the European banks gained on Friday's session, with the sector up over 3 percent.

Meanwhile Dutch electronics giant Philips said its $3.3 billion sale of its Lumileds division had fallen through on objections by the U.S. government. Despite this, shares were higher in trade yet closed roughly flat.

CNBC's panel on Europe's financial future with Geoff Cutmore, Francisco González, Lord Jonathan Hill, Pier Carlo Padoan, Benoît Coeuré and Axel A. Weber.
Is the ECB's QE working? Bank chiefs clash

Not every oil company saw shares soar on Friday. Italian oil firm Saipem saw shares tumble to the bottom of European benchmarks, down over 20 percent, after it priced its 3.5 billion euro rights issue at a 37 percent discount, Reuters reported.

In earnings news, food retailer Delhaize closed up 2.8 percent, after the firm posted a strong sales growth in its home country, Belgium. Other retailers too were trading higher, including Carrefour and Metro, both hovering around 6 percent.

Follow CNBC International on Twitter and Facebook.