European stocks extend rally as real estate firms surge

European stocks on Friday extended gains from the previous session, helped by a surge in German real estate companies and on relief that trade tensions between the United States and China were easing.

The pan-European STOXX 600 index rose 0.31% by 0715 GMT, after hitting near one-month highs on Thursday. The real estate sector sector jumped 1.71%, led by gains in shares of German real estate companies after a report that the rent freeze in Berlin could be less strict than previously planned.

Shares of Deutsche Wohnen, Vonovia SE and LEG Immobilien AG rose between 3.6% and 10%. Meanwhile, Italy's FTSE MIB was set to post its third straight session of gains, up 0.24%, as the country appears to be moving closer to ending a three-week political crisis with the collapse of one government and the arrival of another.