Europe close: Dax at new highs on strength in autos, chemicals

European stocks barreled higher as investors continued to search for yield against a backdrop of improving macro data, according to strategists, with cyclical issues like auto and parts manufacturers and chemicals pacing gains.

The benchmark Stoxx 600 ended up by 0.23% to 392.55, alongside a gain of 1.25% for Germany's Dax to 12,822.94 - a new record high - and an advance of 0.47% to 5,343.41 in the Cac-40.

European equity funds saw a 10th consecutive week of inflows, strategists at Bank of America-Merrill Lynch pointed out, referencing data from EPFR. That was the longest such stretch since December 2015.

"Investment grade and government bond funds have been the main beneficiaries over the past years amid QE. However, amid an improving macro, the reach for yield trade via HY credit, equities and EM debt is reviving," they said.

Banks reversed early gains, ending near the bottom of the pile on the pan-European Stoxx 600, as US non-farm payrolls figures undershot forecasts by a wide margin, weighing on market interest rates.

To take note of, Spain's Banco Popular was an outstanding faller, shedding another 17% of its value.

That weak US data also propelled euro/dollar higher by 0.54% to 1.1277. Technical analysts at Web Financial Group believed a move towards 1.15 might be on the cards if resistance at 1.13 was successfully breached.

The Stoxx 600's gauge of lenders' shares lost 0.32% to 183.49, even as Oil&Gas stocks closed 1.50% lower to 302.32.

Front month Brent crude oil futures erased a further 1.5% to $49.87 a barrel on the ICE, amid talk of increased US crude oil output.

Greece's gross domestic product expanded at a 0.4% quarter-on-quarter clip, higher than an initial estimate of -0.1%.

Factory gate prices in the Eurozone undershot market forecasts for a rise of 0.3% month-on-month in April and an annual rate of advance of 4.5%.

Instead, they were unchanged versus the prior month and 4.3% ahead in comparison to the year-ago period.

Shares in BMW gained despite the German carmaker having reported an 11% drop in US car sales in May.

Linde was also on the frontfoot after its board and that of Praxair voted the day before to merge.

Banco Popular was again sharply lower, taking its weekly loss to 38%.