Healthcare leads European shares higher; Middle East in focus

European shares rose 0.2% on Friday, led by healthcare stocks, despite renewed Middle East tensions and rising oil prices tempering investor optimism.

European shares edged higher on Friday, led by healthcare stocks, though rising oil prices and ‌renewed Middle East tensions kept risk appetite in check.

The pan-European STOXX 600 rose 0.2% to 659.59 points by 0731 GMT, and was on track for a ‌fourth consecutive weekly advance. The return of geopolitical concerns has tempered the optimism that ‌drove markets to record levels earlier this week, with investors weighing the inflationary impact of higher energy prices ahead of a key U.S. jobs report later in the day.

Brent futures ⁠extended ​gains, rising $83.29 a ⁠barrel on further concerns around the opening of the Strait of Hormuz. Iran, working with Oman, ⁠suggested banning vessels deemed hostile from the strait and heavily fining those that violated the ​proposed rules. Focus will now turn to U.S. payrolls data for clues ⁠on the interest-rate outlook. U.S. job growth is expected to have accelerated in July, underscoring the resilience ⁠of ​the labour market and giving the Federal Reserve room to remain focused on inflation.

Earnings also drove market moves. Insurers led sectoral declines, falling 0.6%, ⁠after Munich Re slid 3.7% despite reporting a 6% rise in second-quarter net profit, beating ⁠expectations of ⁠a decline. Healthcare stocks led gains, rising 1.3%. Genmab jumped 7.2% after the cancer drugmaker reported higher first-half revenue and raised ‌its full-year ‌outlook.