Europe close: Geopolitical worries weigh, Italian government talks fail

Stocks on the Continent finished off their best levels heading into the weekend, as traders opted to play it safe given the heightened tensions in the Middle East.

Helping to buoy sentiment nonetheless, and acting as a backdrop alongside the ongoing situation in Syria, was the more positive line taken by the White House overnight on the global trade front.

On Thursday evening, US president Donald Trump said of China "now we're really negotiating and I think they're going to treat us really fairly." Trump also sounded a confident note on the ongoing NAFTA talks, saying they were progressing well.

As well, it was reported that the US Secretary of Defence, James Mattis, had argued in favour of obtaining more evidence of the use of chemical weapons in Syria before any strike, in order buttress the case for action in the eyes of world opinion.

Thus, at the closing bell, and following a brief dip into the red just before the end the session, the benchmark Stoxx 600 was higher by 0.10% or 0.38 points at 379.20, alongside a gain of 0.22% or 27.39 points to 12,442.40 for the German Dax and an advance of 0.11% or 5.80 points to 5,315.02 for the Cac-40.

Banks did particulary well during the first half of the session, but by the end of trading the Stoxx 600's gauge of lenders' shares was up by only 0.10% to 175.96 and far beneath the year-to-date highs of 197.0 hit on 26 January.

Helping to stoke interest in the sector early on had been the more 'hawkish' set of US central bank policy meeting minutes from Wednesday night.

On the economic front, data out at the end of the week revealed a drop in Eurozone imports during February - which analysts said hinted at the 'peak' in growth now being past - and firmer 'core' consumer prices in Germany.

Thus, the euro area's seasonally-adjusted trade surplus improved from €20.2bn for January to €21.0bn in February, according to Eurostat, but only because of a sharp 3.1% fall in import volumes.

Meanwhile, in Germany, the Ministry of Finance confirmed that consumer prices picked-up from a 1.4% year-on-year pace in January to 1.6% for February, as expected.

Also dampening sentiment, two days of talks between Italy's main political parties and President Sergio Mattarella failed to produce a government.

"Our citizens' expectations, the struggle on the world markets, upcoming events within the European Union, increased international tensions in areas not far from Italy require that there is urgently a positive engagement between the parties to reach this goal.

"I will wait a few days, and then I will evaluate how to proceed to break the deadlock," Mattarella said following the latest round of contacts.

To take note of, after the close of trading in London, ratings agency Moody's was set to publish its review of Spain's long-term debt rating.

On the corporate side of things, shares in German lender Deutsche Bank finished lower after Standard&Poor's placed its rating on the bank's long-term debt on credit watch 'negative'.