FRANKFURT: European shares snapped a three-week losing streak on Friday as oil prices retreated for most of the week, although investors remained cautious about developments in the Middle East and surging bond yields.
The pan-European STOXX 600 closed 0.4 percent higher on Friday, adding to the week’s 0.5 percent advance. It was also the index’s biggest weekly gain since early August. In the previous three weeks, the index had lost around 3 percent.
Oil prices fell again on Friday as truce hopes outweighed Houthi attacks on Saudi Arabia.
Negotiators are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, sources close to the talks said this week.
“Even though the conflict in the Middle East seems like it’s potentially reaching a positive phase of dialogue and agreement, there’s still a lot of uncertainty because we’ve been here before,” said Daniela Hathorn, a senior market analyst at Capital.com.
Energy shares fell 1.3 percent and were the biggest sectoral losers.
By contrast, oil-price-sensitive airline stocks advanced, with Ryanair and Lufthansa gaining more than 2 percent each. The travel and leisure index rose 0.8 percent.
The biggest boost came from heavyweight banks, which were the top gainers, up 1.3 percent. Financial services followed with a 1.1 percent rise.