European equities closed higher on Friday, capping a volatile week, as gains in commodity-linked stocks offset caution over elevated bond yields and geopolitical risks.
The Euro Stoxx 50 rose 0.63% to 6,462.22, snapping a four-day losing streak and paring its weekly decline to 1.2%. Outside the euro area, Switzerland’s SMI gained 0.62% to 14,456.98, while the UK’s FTSE 100 advanced 0.64% to 10,816.56. Spanish lender Santander led sector gains with a 2.7% advance.
Commodity stocks led sector performance in the Stoxx 600, supported by signs of stronger Chinese demand. Bloomberg reported that Beijing plans additional fiscal stimulus to counter weaker economic data, lifting shares of miners including Antofagasta, which surged more than 5% in London. Gold mining equities also benefited from a rally in bullion, which hit its highest level since May. Endeavour Mining gained about 4% in London after the U.S. Treasury unexpectedly announced plans to buy back longer-dated Treasuries, aiming to reduce borrowing costs by lowering yields.
Bond markets remained under pressure, particularly in the U.S., where elevated yields reflected concerns over high public debt, persistent inflation and substantial AI-related spending. Analyst Ricardo Evangelista at ActivTrades noted that geopolitical tensions between the U.S. and Iran continued to exert upward pressure on energy prices, compounding rate worries.
In banking, Italy’s Monte dei Paschi di Siena (MPS) unveiled a two-pronged acquisition plan valued at €34 billion to thwart a takeover by Intesa Sanpaolo. MPS proposed a €25.3 billion bid for Banca Popolare di Milano and an €8.7 billion offer for Banca Generali, which is majority-owned by the insurer of the same name. Shares of MPS fell 1.3% in Milan, while BPM and Banca Generali declined 0.5% and 2.1%, respectively. Intesa Sanpaolo slipped 0.7%.
In pharmaceuticals, Bavarian Nordic surged about 9% after raising its outlook and announcing a share buyback program. Jefferies analyst Benjamin Jackson cited stronger-than-expected second-quarter revenue and earnings as key drivers for the Danish vaccine maker.
