European shares rise as earnings support sentiment ahead of key US jobs data

European shares rose 0.3% on Friday, driven by healthcare stocks and positive corporate earnings, despite concerns over higher oil prices and upcoming US jobs data.

European shares edged higher on Friday, led by healthcare stocks, ‌as largely positive corporate earnings offset caution over higher oil prices and ahead of closely watched U.S. jobs data.

The pan-European STOXX 600 rose 0.3% to 659.91 points by 0855 GMT, and was on track for a fourth consecutive weekly advance. Markets consolidated after a busy earnings week ‌that pushed the benchmark to record highs, while expectations of a potential U.S.-Iran agreement also supported sentiment throughout the week.

Investors weighed the inflationary ‌implications of higher oil prices ahead of the U.S. payrolls report later in the day. Brent crude futures extended gains, rising to $83.17 a barrel amid renewed concerns over access to the Strait of Hormuz. Iran, working with Oman, proposed banning vessels deemed hostile from the waterway and imposing steep fines on those breaching the rules.

U.S. job ⁠growth is ​expected to have accelerated in ⁠July, highlighting the labour market's resilience and potentially giving the Federal Reserve more room to keep its focus on inflation. Healthcare stocks led gains, rising 1.8%. Genmab jumped 9.6% after ⁠the cancer drugmaker reported higher first-half revenue and raised its full-year outlook.

Novo Nordisk, Abivax and Zealand Pharma gained between 3.4% and 4.6%. Companies in the STOXX ​600 are now expected to report second-quarter earnings growth of more than 22%, the strongest since the third quarter of ⁠2022, according to data compiled by LSEG.

"Overall, the reporting season reinforces the view that European corporate fundamentals remain healthy, particularly among higher-quality investment-grade issuers," said Gordon Kerr, European macro strategist ⁠at ​KBRA. "However, markets are becoming increasingly selective as elevated valuations leave less room for disappointment."

Kingspan surged 15.8% after results, topping the STOXX 600 gainers, as the building materials firm raised its profit forecast on booming data centre demand. Czech defence firm CSG inched 1.3% after ⁠reporting first-half revenue above expectations, helped by strong ammunition demand and growth in its land systems business. The broader aerospace and defence index ⁠rose 0.9% and was on track ⁠to be the week's best-performing sector, up 5.8%.

Insurers fell 0.3%, after Munich Re slid 2.7% despite reporting a 6% rise in second-quarter net profit, beating expectations of a decline. Elsewhere, Stellantis dropped 2.5% after Bernstein ‌cut Franco-Italian car ‌maker's rating to "underperform" from "market perform".