Europe open: Shares make bright start on US stress test success

European shares started in bright mood on Friday on the back of a strong performance on Wall Street as banks passed the US Federal Reserve's annual stress test and an upwards GDP revision in the world's biggest economy.

The pan-European Stoxx 600 was up 0.34% in early deals with all regional bourses higher.

In economic news, China’s factory activity data stayed in contraction territory for the month of June, according to the National Bureau of Statistics’ latest purchasing managers’ index reading.

The PMI came in at 49, below the 50-mark that separates contraction and growth for the third consecutive month. May's reading stood at 48.8, the lowest since December.

"The strength of the banks during the annual stress test, which plots a parlous scenario to estimate the banks’ ability to cope, is of significant relief to the strength of the system and also its stability following the more recent banking turmoil," said Interactive Investor head of markets Richard Hunter.

"With the half-year reporting season now imminent, thoughts will turn to how companies generally fared amid such a turbulent time and whether their guidance will have been altered as a result."

Investors are now waiting for US Personal Consumption Expenditure data for May as well as preliminary figures on euro zone inflation later in the day.

In equity news, shares in LEG Immobilien surged to the top of the Stoxx as the German property company raised its outlook for 2023.

Reporting by Frank Prenesti for Sharecast.com