Europe close: Stocks edge higher despite trade tensions

Stocks across the Continent finished only slightly higher as traders continued to monitor the ongoing trade war between the US and China and amid reports of bickering between the coalition partners in the Italian government.

According to Bloomberg, Lega leader and deputy Prime Minister Matteo Salvini told a closed door meeting that the coalition might last as little as a few months - or as long as four years - if the Five Star movement did not back his plans for fiscal policy, including a new flat tax and a tax amnesty.

Nevertheless, according to ANSA, Salvini dismissed the possibility of calling fresh elections for September, despite tensions with the Five Star, who lost nearly half its support during the past elections to the European Parliament, saying it was "necessary to prepare the [annual] budget".

By the end of trading, the benchmark Stoxx 600 was had added 0.42% at 372.07, alongside a gain of 0.54% to 11,902.08 for the German Dax while the Cac-40 adding 0.51% to 5,248.91.

The day before, the European Commission sent a letter to the Quirinale telling Italian officials that the country had made too little progress in reducing its public deficit, resulting in a shortfall worth €11bn or 0.7% of the country's gross domestic product.

In parallel, Italy's Five Star movement had called an internal vote on Thursday on whether to keep Luigi di Maio as head of the party.

Acting as a backdrop, according to Bloomberg, which cited people familiar with the matter, Beijing had put purchases of US soybeans on hold.

As well, speaking overnight China's vice foreign minister, Zhang Hanhui, reportedly said that Beijing was against the use of "big sticks" like sanctions, tariffs or protectionism, labelling recent US actions as "naked economic terrorism".

The economic calendar was light on Thursday, but what data there was came in on the weak side of things.

Mimicking a larger than expected slowdown in French inflation revealed the day before, Spain's national statistics office reported that the year-on-year rate of increase in the country's harmonised CPI slipped from 1.6% to 0.9%, missing forecasts for a decrease to 1.2%.

Shares in Axel Springer, owner of German daily Bild, added to the previous day's gains after US private equity outfit KKR said it might buy out minority shareholders with a view to taking the group private.