Europe close: Stocks higher amid lingering trade optimism ahead of ECB meeting
European shares finished higher on Friday albeit with confirmation from Washington that high-level US-China trade talks were on for early October offset by a weaker than expected reading on US non-farm payrolls for August.
Investors were also looking out to a week full of potentially decisive risk events ahead, not least the European Central Bank's policy meeting next Thursday.
"Barring another tweet from the US president about trade wars, indices look set to finish the week with solid gains. The frustrations of August have been put firmly behind them, but next week’s ECB meeting offers up a possible hurdle to further gains – it is far from clear that the bank is committed to fresh easing," said IG's Chris Beauchamp.
"Still, if the US and China do manage to keep to the same script on negotiations, the deeper fundamentals point to higher prices for equities."
By the close of trading, the pan-European Stoxx 600 index was 0.32% higher to 387.14, with Germany's Dax up by 0.54% at 12,191.73, France's CAC 40 ahead by 0.19% at 5,603.99 and London's FTSE 100 had gained 0.15% to 7,282.34.
In remarks to CNBC, US National economic council director, Larry Kudlow, confirmed that top US and Chinese trade officials would meet in early October and said he saw the potential for "something positive" to come out of thirteenth round of negotiations.
That helped to offset the impact of data showing that US non-farm payrolls increased by 130,000 in August (consensus: 165,000), amid a slowdown in private sector hiring.
Back on home turf, Prime Minister Boris Johnson lost control of the Brexit timetable, along with his parliamentary majority and four separate votes as opposition lawmakers moved to block a no-deal scenario.
David Cheetham, market analyst at XTB, said: "Boris Johnson’s plans for a general election in the middle of October have seemingly been thwarted for the time being and hopes for a resolution to the Brexit stalemate anytime soon are once more starting to look little more than wishful thinking."
"Prolonged periods of uncertainty is typically associated with weakness in a currency, but the pound has responded positively to the latest developments as the fading prospects of a no-deal have attracted buyers back into the market."
On the macro front, data released by EU statistics agency Eurostat showed Eurozone GDP grew by 0.2% in the second quarter, down from 0.4% in the first quarter but in line with expectations, following a slowdown in consumer spending and public consumption growth.
Similarly, employment in the currency bloc rose by 0.2% in the quarter, down from 0.4% growth in the first quarter, while on year growth came in at 1.2% compared to 1.4% in the second quarter of 2018.
Meanwhile, German industrial production fell 0.6% month on month in July against expectations of a 0.4% rise, according to Germany's Federal Office of Statistics.
In corporate news, German mobile provider 1+1 Drillisch led the Stoxx 600 higher, rising by more than 10% after the nation's government signed a pact to build 1,400 masts nationwide in order to close up white spots.
Glanbia was among the risers as analysts at Jefferies upgraded the stock from 'hold' to 'buy' as they judged the Irish nutrition business' aims for the full year to be achievable.
FTSE 250-listed G4S surged after Sky News reported that US cash-handling business The Brink's Company could make a £1bn bid for the security services firm's cash solutions arm.
Finally, Sodexo shares retreated as analysts at Barclays warned that the French catering business could find itself threatened by food delivery rivals.