Europe close: Stocks end higher on US stimulus hopes

European stocks finished moderately higher on Friday as investors continued to hold out hope for progress on US stimulus measures.

The pan-European Stoxx 600 index added 0.64% to 414.0, alongside a 0.6% rise for the French Cac-40 to 5,703.67.

Germany's Dax on the other hand only edged up by 0.06% to 14,049.89.

Fourth quarter GDP in the UK rose by more than 1% in the final three months of 2020, helping the economy to avoid a double dip recession for the time being.

“It has been a fairly uneventful week for European equity markets, with US markets continuing to grab the headlines with another series of record highs, and though the DAX also managed to eke out a new record at the beginning of the week, there has been little in the way of momentum behind any of this week’s moves,” said CMC Markets analyst Michael Hewson.

Travel and leisure stocks reversed early losses despite news that many people looked set to delay any overseas holidays this summer due to the coronavirus pandemic with mixed and muddled messages coming from the UK government in particular.

Shares in British Airways owner IAG and easyJet ended the day on the up, but not so stock in Carnival and TUI.

Carnival Cruise Lines suffered a double whammy after being downgraded to a 'sell' by Berenberg, along with Norwegian Cruise Lines, as the brokerage said it was "negatively disposed" toward leisure stocks in the aftermath of the pandemic.

ING Groep jumped 6.71% after the Dutch bank reported better-than-expected fourth-quarter pre-tax earnings of €1.05bn.

Shares in French lottery operator Les Francaise des Jeux rose 0.31%, having been more than 6% higher earlier, after the company said strong business in the second half helped limit the decline in annual stakes - down 7% to €16bn and revenue 6% lower at €1.9bn.