Europe close: Markets end positive a week after Brexit

European stocks managed to finish Friday comfortably in the green, after some hesitance in the middle of the session as investors digested the prospect of further central bank easing in the wake of the Brexit vote.

The benchmark Stoxx Europe 600 index was last up 0.65%, Germany’s DAX was around the 1% mark and France’s CAC was 0.79% higher.

In London, the FTSE 100 was nearing the 1.2% mark while the more domestically-focused FTSE 250 was ahead by more than 1.2%.

Financial stocks were among the worst performers of the day after European Central Bank sources refuted claims that the central bank was considering abandoning its capital key for quantitative easing purchases.

Oil prices continued their rollercoaster ride, and were mixed towards the end of the day before turning higher.

West Texas Intermediate was last up 0.04% at $48.35 per barrel, and Brent crude was 0.12% higher at $49.77.

Stocks had kicked off the first day of the quarter on the front foot, supported by comments from Bank of England governor Mark Carney on Thursday.

He hinted at the prospect of further interest rate cuts over the summer following the UK’s decision to leave the European Union.

"The committee will make an initial assessment on 14 July, and a full assessment complete with a new forecast will follow in the August Inflation Report," Carney said.

"In August, we will also discuss further the range of instruments at our disposal."

Mike van Dulken, head of research at Accendo Markets, said: “While markets like the idea of more stimulus from any major central bank, they especially like the idea that a weak GBP sterling keeps the USD strong and thus fends off the Fed from a rate rise for a good while longer.”

Investors in Europe also digested data out of China on Friday that showed the manufacturing sector weakened, but the services sector improved.

The unofficial Caixin manufacturing purchasing managers' index dropped for the third month in a row to 48.6 in June from 49.2 in May, missing expectations for it to remain unchanged.

A reading below 50 indicates contraction.

China’s official manufacturing PMI fell to 50.0 in June from 50.1 the previous month, in line with expectations.

Official data out of Beijing showed the non-manufacturing PMI, which covers services such as retail and real estate, improved to 53.7 from 53.1 in May.

In corporate news, AstraZeneca was pushing higher after a slow start, after announcing before the open that it has entered into agreements to support its strategic focus on three main therapy areas - respiratory, inflammation and autoimmunity; cardiovascular and metabolic disease; and oncology.

BHP Billiton was well ahead despite saying that its plans to settle claims over the 2015 Samarco mine disaster had suffered a major blow after a Brazilian court reinstated a AUD 8bn public civil claim.

Eurostat data released during the day showed the eurozone unemployment rate took a dip in May to its lowest level since July 2011.

The unemployment rate came in at 10.1%, down from 10.2% in April and 11% in May 2015, and in line with expectations.

Unemployment in the EU-28 group of countries declined to 8.6% in May from 8.7% the month before and 9.6% in May 2015.

That was the lowest rate recorded in the group since March 2009.

Elsewhere, eurozone manufacturing growth rose to a six-month high in June, according to Markit, though it warned that the data was gathered before the UK’s decision to the leave the European Union.

Markit’s final Eurozone purchasing managers’ index for June came in at 52.8, up from the flash estimate of 52.6 and May’s reading of 51.5, with growth in new orders and production accelerating to the fastest in the year so far.