(RTTNews.com) - European stocks were sharply higher on Friday as investors shrugged off trade war worries and welcomed news on the formation of a new government in Italy, the euro zone's third-largest economy.
Italy's anti-establishment Five Star Movement and the far-right League reached a deal to form a populist government, helping avert the prospect of a snap election.
On the data front, the upturn in the Eurozone manufacturing sector showed further signs of cooling in May, as initially estimated, final data from IHS Markit showed.
The factory Purchasing Managers' Index fell to a 15-month low of 55.5 from 56.2 in April, matching the flash estimate of 55.5.
Separately, survey data from IHS Markit and Chartered Institute of Procurement & Supply showed the U.K. manufacturing sector expanded at a faster pace in May.
The manufacturing Purchasing Managers' Index rose unexpectedly to 54.4 in May from a 17-month low of 53.9 in April. The score was expected to drop to 53.5.
The pan-European Stoxx Europe 600 index was up over 1 percent at 386.96 in late opening deals after closing 0.6 percent lower the previous day.
The German DAX, France's CAC 40 index and the U.K.'s FTSE 100 were up between 0.8 percent and 1.3 percent, while Italy's FTSE MIB was up as much as 2.5 percent.
Italian banks soared, with Banco BPM surging over 8 percent.
Royal Bank of Scotland Group gained 1.6 percent after Standard & Poor's upgraded the long-term ratings of National Westminster Bank Plc.
Deutsche Bank shares rallied 3.5 percent. Responding to media reports regarding the regulatory ratings of its U.S. entities, the German lender said that it is highly focused on addressing identified weaknesses in its U.S. operations.
Mining stocks were broadly higher, with Antofagasta, Glencore, Anglo American and Rio Tinto rising 2-4 percent.
Elior Group shares jumped over 6 percent after Credit Suisse upgraded its rating on the stock.
Dialog Semiconductor shares slumped 16 percent after a warning that Apple will source fewer main smartphone power chips from the company.
Swedish radiation therapy equipment maker Elekta dropped 1.3 percent after its Q4 adjusted operating profit came in below analyst estimates.
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