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European stocks close sharply higher on rising trade and Brexit optimism

Key Points
  • The pan-European Stoxx 600 climbed over 2%, with most sectors and all major bourses in positive territory.
  • Markets got a boost as Trump said there were "warmer feelings" over trade discussions than in the recent past.
  • Sterling jumped further after an EU spokesperson described last-ditch talks with the U.K. as "constructive."

European stocks closed sharply higher Friday as investors tracked positive signals around U.S.-China trade talks and Brexit.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European Stoxx 600 closed provisionally up by more than 2%, with bank shares soaring close to 5% higher as most sectors and all major bourses traded in positive territory.

Day one of trade talks between top U.S. and Chinese negotiators ended with markets hoping for a limited trade deal and a delay to planned increases in U.S. tariffs planned for next week. U.S. President Donald Trump characterized the discussions as "very, very good" and plans to meet with Chinese Vice Premier Liu He at the White House on Friday.

Markets got a further boost as Trump said on Friday that there were "warmer feelings" over trade discussions than in the recent past. "I will be meeting with the Vice Premier today," the president tweeted. "All would like to see something significant happen!"

On Wall Street, the Dow Jones Industrial Average climbed more than 400 points while the S&P 500 and Nasdaq indexes were also in the green.

In oil markets, crude prices jumped 1.8% on Friday after Iranian officials said that two rockets had struck an Iranian tanker traveling through the Red Sea.

Back in Europe, sterling extended gains from the previous session after an EU spokesperson described last-ditch talks with the U.K. as "constructive." Cable rose almost 2% to $1.2675.

J.P. Morgan said Friday it had lifted its outlook for the chances of a Brexit deal from 5% to 50%.

Stocks on the move

In corporate news, Renault ousted CEO Thierry Bollore in a shareholder vote on Friday morning, naming CFO Clotilde Delbos as its interim CEO with immediate effect. Shares of the automaker were trading 5% higher on the back of the news.

Elsewhere, SAP shares jumped 10% after board members Jennifer Morgan and Christian Klein were appointed co-CEOs as the software giant announced that Bill McDermott was stepping down.

Publicis meanwhile plunged 14.5% to the bottom of the Stoxx 600 after the world's third-largest advertising company cut its full-year sales target again. Hugo Boss shares also tumbled, down over 13%, after the firm reported disappointing third-quarter results and cutting its guidance.