European shares on Friday rose, but settled slightly below session highs after lawmakers rejected British Prime Minister Theresa May’s deal to exit the EU for the third time, increasing the possibility of a “no deal” or prolonged Brexit.
The pan-European STOXX 600 on Friday closed up 2.24 points, or 0.6 percent, at 379.08, having earlier hit session highs on encouraging signals from US-China trade talks. That was a 0.8 percent rise from a close of 376.03 on March 22.
The benchmark clocked its best quarter in four years, although gains this month were lower than in the previous two months as a bruising trade war, which contributed to a slowdown in global growth, and the chaos around Brexit hit sentiment.
All subsectors within the pan-regional benchmark ended the quarter higher, led by the retail sector’s 20 percent surge over the past three months.
France’s CAC 40 on Friday outperformed with a gain of 53.99 points, or 1 percent, to 5,350.53, jumping 1.5 percent from a close of 5,269.92 on March 22.
Germany’s trade-sensitive DAX on Friday rose 97.88 points, or 0.9 percent, to 11,526.04, a gain of 1.4 percent from 11,364.17 a week earlier.
Britain’s exporter-heavy FTSE 100 was on Friday up 44.86 points, or 0.6 percent, at 7,279.19, rising 1 percent from a close of 7,207.59 on March 22.
Stocks in Dublin — a barometer for Brexit sentiment — closed 1.5 percent higher, posting their best day in almost two months.
Britain now has until April 12 to convince the other 27 EU capitals that it has an alternative path out of the impasse or see itself cast out of the bloc with no deal on post-Brexit ties with its largest trading ally.
Swedish-based apparel retailer Hennes & Mauritz AB was among the top gainers on the STOXX 600, up 9.5 percent after reporting a smaller-than-expected drop in quarterly pretax profit.
The European labor market is robust and personal income gains are boosting retail sales, ING Groep NV economist Bert Colijn said.
The retail sector logged its best quarter since the second quarter of 2003, and while banks posted the second smallest sectoral gain, they broke a five-quarter losing run.
Stocks also got a boost from reports that US Secretary of the Treasury Steven Mnuchin had a productive working dinner in Beijing as US-China trade talks ended.
Any move toward a deal would be positive for European markets, Colijn said, as the slowdown in China and the US has had an impact on exports from Europe.
Additional reporting by staff writer
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