European Stocks Close Higher for Second Weekly Gain, Led by Oil Stocks, Drugmakers as Miners Lose Ground

European equity indices closed higher on Friday buoyed by optimism about a growth-supportive economic policy in the US under incoming president Donald Trump, which investors believe will spur a global economic expansion.

In economic news, the annual inflation rate in the 19-nation euro area climbed to 0.6% in November from a 0.5% in October, Eurostat, the European Union's statistics office confirmed a flash estimate given at the end of November.

The 19-nation euro region's trade surplus with the rest of the world narrowed in October as exports declined more than imports, Eurostat said separately. The trade surplus was EUR20.1 billion ($21 billion) in October, shrinking from a surplus of EUR23.2 billion a year earlier. Exports fell 5% in October from a year earlier to EUR172.5 billion while imports fell 3% to EUR152.4 billion.

UK businesses became more optimistic about the economy in November, with confidence holding below levels reached before the referendum on European Union (EU) membership, a YouGov/Centre for Economic and Business Research (CEBR) survey published on Friday showed. The economic confidence index compiled by YouGov and CEBR, a research company, rose by two points in November to 111.1, the second highest level since Britons backed a withdrawal from the EU in June, known as Brexit.

A separate survey published on Friday indicated that British manufacturers' order books were the strongest since mid-2014 in December. The Confederation of British Industry's ( CBI ) monthly index of factory orders climbed to a reading of 0 in December from minus 3 in November, its highest level in 20 months.

Oil and gas stocks advanced on Friday in Europe on signs that crude producers were preparing to implement agreed output reductions. Reuters reported that Middle Eastern producers have begun to notify clients of production cuts and Goldman Sachs revised its crude oil price forecast for Q2 of 2017 higher, predicting that Brent, the international benchmark, will reach $59 a barrel rather than $56.50 a barrel as expected previously, CNBC said.

Healthcare shares were lifted across Europe, led by Switzerland's Actelion on reports that talks with Sanofi ( SNY ) are progressing about a takeover of the Swiss biotechnology firm. Actelion rose more than 11% in Zurich, following a report by Bloomberg on Friday citing anonymous sources that a deal may be reached with Sanofi as soon as next week.

On the FTSE 100 index in London, banking group Old Mutual led gainers, up 3.6%. Oil giant BP advanced 2.2%, while basic resources producers were lower after a drop in the price of iron ore, with Antofagasta falling 2% and BHP Billion dropping 0.5%.

In Frankfurt on the benchmark DAX, airline Deutsche Lufthansa followed a rally in European leisure-related shares, leading with a 1.9% gain. German chemicals firm BASF and electric utility RWE followed, rising 1.6% and 1.2%, respectively.

On the CAC 40 index in Paris, Finnish technology firm Nokia led with a 4.2% gain. French telecom provider Orange followed, rising 2.1%. French oil major Total added 1.5% while Sanofi led decliners, sliding 2.1%.

The FTSE 100 in London closed 0.18% higher and the DAX in Frankfurt gained 0.33% by close of play on Friday. The CAC 40 index in Paris closed 0.29% higher.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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