European stocks rose to fresh six-week highs on Friday, helped by an easing of fears over US tariffs and some solid company results.
Shares in consumer goods company Reckitt Benckiser Group PLC, supermarket retailer Carrefour SA, construction group Vinci SA, BT Group and bank BBVA SA rose following well-received results, lifting the pan-European STOXX 600 benchmark, closing 0.6 percent higher.
“On average, earnings updates are quite good,” Geneva, Switzerland-based Prime Partners Group fund manager Jerome Schupp said. “The message about the second half is also reassuring given the uncertainties regarding trade wars.”
European second-quarter earnings per share growth has accelerated to six percent from 0 percent in the first, a result they said was good given the deterioration in euro area growth momentum, Deutsche Bank AG said.
Hopes of a breakthrough in US-EU trade talks on Thursday lifted the STOXX 600 to its highest level since the middle of last month as automakers, which rely on exports for growth, rose sharply.
The index ended the week up 1.7 percent.
However, investors kept a degree of caution.
The US Department of Commerce is to continue its probe into whether car imports pose a national security risk despite ongoing trade talks with the EU, but US President Donald Trump asked that no action be taken at this time, US Secretary of Commerce Wilbur Ross said on Thursday.
Automakers declined 0.2 percent on the STOXX 600 on Friday.
Renault SA rose nearly 2 percent after a volatile start as the French automaker achieved record profitability in the first half of this year as emerging market sales surged.
“Results came in line with a modest headline beat and better net liquidity, but details of margin development, and capital intensity are mixed and likely to keep pressure on margins,” Jefferies LLC analysts said in a note.
Shares in German automakers BMW AG and Daimler AG, which are heavily exposed to the US market, slipped slightly.
Mining company BHP Billiton Ltd rose 3 percent after BP PLC agreed to buy its US shale oil and gas assets for US$10.5 billion. BP shares reversed earlier losses to end 0.5 percent higher.
“The shale deal presents a promising opportunity for BP to reverse many years of underinvestment,” Accendo Markets Artjom analyst Artjom Hatsaturjants said.
“Still, it comes at a price of a short-term hit to shareholder value and would divide those investors looking for a quick profit from rising oil prices and those who see a long-term opportunity in holding energy stocks,” he added.
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