Europe close: Stocks end week on an up note, despite poor data

European shares finished the week on a slightly positive note Friday even after the results of two key surveys pointed to a contraction in the euro area's economy in July - albeit alongside a marked cooling in price pressures.

On a more positive note, Russia and Ukraine inked a three-month deal to resume grain exports from three Ukrainian ports.

"Investors will be pleased to see that the rally in stocks remains intact, having lasted longer than some of the other rebounds we have seen so far this year," said IG chief market analyst Chris Beauchamp.

"But they will be wary of pushing their luck too hard into next week, given the avalanche of earnings heading their way, plus a Fed decision and the first reading on US second quarter GDP that might easily provide fresh recession worries."

The pan-European Stoxx 600 index was up 0.31% at 425.71 with all major bourses also trading in positive territory.

Milan's FTSE Mib edged up 0.07% to 21,211.98, despite the resignation of Prime Minister Mario Draghi after the collapse of his national unity government.

Spain's Ibex 35 meanwhile put on 0.49% to 8,051.6, while the yield on the benchmark 10-year government bond fell by 21 basis points to 2.24%.

Euro/dollar was stable at 1.0234.

S&P Global's euro area services sector Purchasing Managers' Index printed at 50.6 for the month of July, down from 53.0 in June and against a consensus forecast for 52.0.

A rival PMI for manufacturing meanwhile declined from 52.1 to 49.6, missing forecasts for a reading of 51.0.

"Excluding pandemic lockdown months, July’s contraction is the first signalled by the PMI since June 2013, indicative of the economy contracting at a 0.1% quarterly rate," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

"Although only modest at present, a steep loss of new orders, falling backlogs of work and gloomier business expectations all point to the rate of decline gathering further momentum as the summer progresses."

In equity news, shares in food takeaway delivery companies surged after Delivery Hero reported higher gross merchandise value. Just Eat Takeaway and meal kit outfit HelloFresh were gainers on the news.

Lloyd's of London insurer Beazley surged after the company raised its full-year profitability outlook.

Danske Bank dropped 2.16% as the lender axed dividends, while Swiss elevator and escalator manufacturer Schindler slipped 4.0% on cutting 2022 revenue guidance.

Aluminium-maker Norsk Hydro rose 6.4% on proposing an extra dividend and offering share buybacks.

Uniper crumbled 28% even after Berlin unveiled a bail out for the stricken energy outfit.