European stocks finish on a high after EU migration deal; oil prices climb

  • The pan-European Stoxx 600 ended the session up 0.81 percent provisionally, supported by strong trade seen in markets overseas. On the week however, the STOXX 600 dropped 1.32 percent.
  • Market focus remained largely attuned to concerns over global trade, a week before initial U.S. and Chinese tariffs are due to take effect.
  • European leaders reached a tentative agreement on migration after almost 10 hours of talks at a crunch summit in Brussels, Belgium.

European equities closed higher on average Friday after EU leaders hashed out a deal on migration, although underlying market sentiment was soured somewhat by ongoing anxiety over ongoing global trade frictions.

The pan-European Stoxx 600 ended the session up 0.81 percent provisionally, supported by strong trade seen in markets overseas. On the week however, the STOXX 600 dropped 1.32 percent.

During Friday's session, the U.K.'s FTSE 100 popped 0.28 percent, while France's CAC 40 and Germany's DAX extended gains, closing up 0.91 and 1.06 percent respectively. Almost all sectors finished the day in the black.

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A slew of industries posted sharp gains by the close, with the Technology basket closing up 1.55 percent and Industrials rising 1.6 percent. Europe's Basic Resources sector closed up 0.83 percent with Anglo American leading the charge. Shares of the miner rose 3.6 percent, after it said that it expected earnings through the first six months of 2018 to be at least 20 percent higher than the same period last year.

Looking at individual stocks, Spain's Caixabank closed up over 3 percent after the lender announced it had agreed to sell 80 percent of its real estate assets to private equity fund Lone Star. The news comes as Spain's banks continue to look to offload impaired real-estate and mortgages after the global financial crisis burst the country's real estate bubble in 2008.

Sticking with the top performers, Osram was Europe's biggest gainer, closing up almost 6.5 percent after Bank of America Merrill Lynch doubled its rating on the stock, raising it to "buy" from "underperform". This despite other brokers slashed their rating or target price on the lighting firm.

Meanwhile, Galapagos tumbled, closing down 4.38 percent, after reporting disappointing drug trial results. RBC Capital Markets subsequently moved to downgrade its target price for the stock to $94 from $100.

Trade fears

Market focus is largely attuned to concerns over global trade, a week before initial U.S. and Chinese tariffs are due to take effect. President Donald Trump’s administration is set to activate tariffs on Chinese goods worth around $34 billion on July 6, which is then widely expected to trigger a tit-for-tat response from Beijing.

Elsewhere, oil prices extended gains during afternoon trade, as investors awaited for the U.S. to impose sanctions on Iran. Around Europe's close, Brent hovered at $79.45, while U.S. crude traded above $74 per barrel.

On Wall Street, stocks posted sharp gains Friday morning with the Dow marking gains of some 250 points around Europe's close.

Back in Europe, political leaders reached a tentative agreement on migration after almost 10 hours of talks at a crunch summit in Brussels, Belgium, on Thursday. The deal, which falls short of an overall agreement to revise the EU’s asylum laws, is set to create new “centers” for housing and processing asylum seekers.

A European consensus on migration — one of the bloc’s most contentious issues — is thought to have helped German Chancellor Angela Merkel avert a political crisis at home.

Euro zone inflation rises above ECB target

On the data front, euro zone inflation rose to its highest rate in more than a year this month as surging energy prices lifted price growth above the European Central Bank's (ECB) target. Data from Eurostat showed that inflation among the 19 countries sharing the euro edged higher to reach 2 percent in June, up from 1.9 percent a month earlier. The ECB targets inflation at just below 2 percent.

Elsewhere, Britain's economic growth has been upwardly revised for the first quarter of the year after construction data was found to be stronger than earlier estimates.