European equities edged higher on Friday, supported by early gains in U.S. markets, though overall sentiment remained cautious amid geopolitical tensions. The Euro Stoxx 50, the region’s benchmark index, rose 0.32% to 6,442.34 points by midday trading.
The advance was uneven outside the euro area. The Swiss SMI declined 0.58% to 14,284.80, while the UK’s FTSE 100 showed little movement. Analysts at ActivTrades pointed to the unresolved conflict between the U.S. and Iran, which continues to exert upward pressure on energy prices and reinforces concerns over inflation and interest rates.
Commodities emerged as the strongest sector, driven by expectations of stronger Chinese demand. Bloomberg reported that Beijing plans to bolster its economy with additional fiscal stimulus, responding to weaker-than-expected economic data. The move follows two consecutive months of improving business sentiment in the eurozone, despite ongoing geopolitical risks.
In the banking sector, Italian lender Monte dei Paschi di Siena (MPS) escalated its defensive strategy with a €34 billion share buyback plan aimed at preventing a takeover by Intesa Sanpaolo. The bank proposed a €25.3 billion bid for Banca Popolare di Milano (BPM), which values the target at €25.3 billion, and a separate €8.7 billion offer for Banca Generali, a majority-owned subsidiary of the insurer Generali. Shares of MPS rose 1% on the news, while other affected banks showed muted reactions.
Pharma stocks lagged overall, though Bavarian Nordic surged nearly 9% after raising its outlook and announcing a share buyback program. Jefferies analyst Benjamin Jackson noted the company’s second-quarter performance exceeded revenue and earnings expectations.
