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European stocks close higher ahead of Trump-Xi meeting at G-20

Key Points
  • The pan-European Stoxx 600 closed provisionally 0.7% higher.
  • The U.S. and China maintain firm stances going into this weekend's G-20 meeting.
  • Merlin Entertainments soars 14% after news it's agreed to be acquired.

European markets closed higher Friday as investors track developments at the G-20 summit in Osaka, Japan, where President Donald Trump and Chinese President Xi Jinping are expected to meet amid the ongoing trade war.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European Stoxx 600 closed provisionally 0.7% higher. Autos and basic resources, two sectors particularly sensitive to trade-related news, rose around 0.8% and 1.5% respectively.

The world's two largest economies have maintained firm stances going into the weekend, with the Chinese Ministry of Commerce calling on Washington to cancel its pressure and sanction measures on Huawei and other Chinese companies, while Trump reiterated a threat to impose tariffs on all Chinese imports if talks fail.

But a senior Trump administration official told CNBC Friday that the president wouldn't need to hear much from Chinese officials to at least strike a truce in the trade war between the two countries.

On Wall Street, stocks opened higher, with bank shares leading the way following the release of the U.S. Federal Reserve's annual health check for the banking sector.

In Europe, Deutsche Bank on Thursday passed the Fed's stress test, which gauges banks' abilities to weather a major economic downturn. The German lender is considering laying off up to 20,000 people, according to a Wall Street Journal report. Deutsche shares climbed about 3%.

Credit Suisse, however, is now subject to conditions in its U.S. operations after the central bank found weaknesses in its capital planning processes. The Swiss lender's stock fell marginally.

Euro zone inflation was stable at 1.2% in June, but narrower indicators which exclude volatile prices rose, according to estimates from European Union statistics agency Eurostat. The euro traded slightly higher at $1.1371.

In the U.K., Merlin Entertainments said on Friday it had agreed to be acquired by the investment vehicle of Lego's founding family and private equity firm Blackstone Group LP. Merlin, which operates Madame Tussauds waxworks exhibits around the world, saw its share price surge almost 14% on the back of the announcement.

Meanwhile British-Swiss mining giant Glencore is under the spotlight as at least 43 miners in eastern Democratic Republic of Congo have now been confirmed dead following the collapse of a copper and cobalt mine owned by the company. Local officials told Reuters that the army would deploy at the mine as the search for more victims continues.

The company's stock seemed to shrug off the news on Friday, trading nearly 3.6% higher.

On the other end was French retailer Casino Guichard-Perrachon, which saw its shares drop 5% to the bottom of the Stoxx 600 following news of a shareholding restructuring for its Latin American operations.