European shares were little changed on Friday but remained on track for a weekly decline as investors weighed stalled U.S. Iran peace efforts, rising oil prices and upcoming euro zone economic data.
The STOXX 600 edged up 0.05% to 659.65 by 0710 GMT, staying close to record highs despite losses earlier in the week.
European equities have continued to receive support from a strong earnings season. Second quarter profit expectations for Europe’s blue chip companies have increased for an eighth consecutive week, with aggregate STOXX 600 earnings now expected to rise 23.4%, driven largely by strong energy and materials profits.
Iran Tensions Push Oil Higher
Renewed geopolitical tensions have nevertheless weakened investor appetite for risk.
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Oil futures rose 1% to $87.93 a barrel after the United States threatened an indefinite naval blockade of Iran, raising concerns over potential disruptions to global crude supplies.
Negotiations between Washington and Tehran remained deadlocked, with both sides adopting tougher positions in recent days.
Higher oil prices could add to inflationary pressure and complicate the outlook for central banks if the conflict continues to disrupt energy markets.
Investors Watch Economic Data
Markets also took some reassurance from softer U.S. consumer and producer price data released this week, strengthening expectations that the Federal Reserve may avoid further monetary tightening.
Attention now turns to euro zone employment and GDP data for further clues about the health of the regional economy.
Technology Stocks Lead Gains
European technology stocks were among the strongest performers, with the sector rising 1.4%.
Basic resources stocks were the biggest decliners, falling 1.6% as investors assessed the impact of geopolitical uncertainty and commodity price movements.
Corporate news remained limited as Europe’s earnings season approached its end.
With information from Reuters.
