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European shares rallied at open on Friday, with all major indexes gaining more than 1%, as oil prices slipped on hopes for a diplomatic breakthrough in the Middle East.
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Brent crude fell more than 2%, extending the previous session’s losses, after U.S. President Donald Trump cancelled plans to strike Iran, reducing fears of an escalation of hostilities. [O/R]
The pan-European STOXX 600 index advanced 1.2% to 628.81 points by 0720 GMT and was set for a 1% weekly gain. All sectors except energy rose.
The benchmark snapped a four-day losing streak on Thursday, as investors digested the European Central Bank’s rate hike and largely looked past escalating rhetoric around the U.S.-Iran conflict.
Travel and leisure stocks led sectoral gains with a 3.4% rise, with Lufthansa and Air France jumping 4.6% and 5.7%, respectively.
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Banks gained 2.3%, with Barclays and Standard Chartered climbing more than 2%.
AI equipment makers Legrand and Schneider Electric climbed 1% and 1.4%, respectively.
Novo Nordisk added 0.4% after Britain’s medicine regulator approved the drugmaker’s weight-loss pill on Thursday, making the UK the first market in Europe where patients can access the oral treatment.
Among other movers, online gaming operator Entain rose 3.2% after Barclays upgraded the European gaming sector to “market-weight”.
On the data front, German inflation eased slightly to 2.7% in May, while Britain’s economy contracted by 0.1% in April.
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(Reporting by Utkarsh Hathi in Bengaluru; Editing by Eileen Soreng)
Copyright Reuters or USA Today Network via Reuters Connect.