European shares rose last Friday, hitting their highest level since early December as renewed hopes for trade negotiations between the United States and China lifted markets from Wall Street to Beijing.
The pan-European STOXX 600 benchmark index was up 1 percent with trade-exposed indexes or stocks gaining most and automotive.
However, sentiment remains fragile as the U.S. government does not appear to have finalized its position on its trade talks with China.
“It seems almost impossible to sensibly gauge where U.S. – China relations stand”, Jasper Lawler from LCG said.
“This announcement was not wholly unexpected so we do not expect the shares to react by the full potential consensus net profit adjustment”, Citi analysts said.
The European banking sector was recovering, up 1.8 percent, from the previous session’s losses when a profit warning by France’s SocGen hit the sector hard.
Oil and gas stocks also rose strongly, up 1.5 percent, as the oil price strengthened after a report showed production fell sharply last month, easing fears about prolonged oversupply.
Friday’s corporate results included French supermarket retailer Casino whose shares rose 6 percent as traders and analysts said fourth quarter sales had weathered “Yellow Vest” anti-government demonstrations in France.
“France has held up well despite disruption from protests”, Jefferies said.
Other optimism came from German online meal-kit delivery service HelloFresh which surged 16 percent after raising its revenue forecast. Investors are bracing for swings in European stocks as earnings test whether fears about slowing economic and corporate growth that punished equities in recent months are a reality.