European shares pushed higher on Friday as a resurgent appetite for risk, centred on a rebound in technology names, lifted major regional indexes and put them on track for a fourth consecutive month of gains. Market participants were also preparing for a flash Eurozone consumer inflation reading due later in the day.
The pan-European STOXX 600 climbed 0.8% in early trading, extending a strong monthly run and rising 1.3% for July. National bourses rose in tandem: Germany's DAX added 0.8%, France's CAC 40 was up 0.5%, London's FTSE 100 gained 0.4% and Italy's FTSE MIB improved 0.8%.
The advance was fuelled by a renewed focus on artificial intelligence investments after a global technology rebound. European tech desks tracked overnight gains on US markets and an Asian rally in semiconductor stocks following robust quarterly reports and bullish capital expenditure outlooks from Microsoft and Amazon. Those results helped ease investor concerns about excessive cash burn and lofty AI valuations.
July's end-of-month upswing capped a resilient month for European equities, which navigated several headwinds during the period, including escalating military friction in the Middle East, swings in energy prices and unclear interest-rate signals from major central banks. Regional strength was further underpinned by a solid second-quarter earnings season, where companies in consumer, banking and defence sectors demonstrated pricing power that helped shield broader continental benchmarks from economic pressures.
Market attention shifted to incoming macro data, with the flash Eurozone Consumer Price Index for July expected later in the session. Economists were forecasting a slight uptick in headline inflation, after state-level German figures released on Thursday indicated persistent price pressures - a development that could complicate discussions about future rate cuts at the European Central Bank.
On the corporate front, Credit Agricole shares jumped after the French lender beat second-quarter profit expectations, supported by strong retail and investment banking revenues. The Swiss National Bank also reported a sizeable second-quarter profit, attributed to gains on foreign currencies and higher equity valuations.
In the autos and luxury segment, Ferrari raised its full-year earnings guidance, citing strong demand for bespoke models and solid pricing power, prompting gains in the company's shares. Conversely, Siemens Healthineers fell 3.3% after cutting its full-year revenue forecast, citing continuing supply chain bottlenecks and weaker equipment orders in some overseas markets. British Airways-owner IAG declined 5% following a sharp drop in second-quarter profit.
As July closes, investors are closely watching upcoming inflation data and any central bank commentary to assess whether Europe's multi-month equity advance can be sustained into the second half of the year.