Global Market: European shares rise as healthcare stocks offset geopolitical concerns; investors await US jobs data

European stock markets traded modestly higher on Friday, supported by gains in healthcare stocks, even as rising oil prices and renewed geopolitical tensions in the Middle East kept investor sentiment cautious, Reuters said.

The pan-European STOXX 600 index rose 0.2% to 659.59 points in early trading and remained on track to post its fourth consecutive weekly gain. Investors continued to balance strong corporate earnings with growing concerns over energy prices and geopolitical developments.

Market optimism that had pushed European equities to record highs earlier in the week eased as oil prices climbed amid fresh concerns over shipping through the Strait of Hormuz. Brent crude futures extended gains to trade around $83.29 per barrel after reports that Iran, in coordination with Oman, proposed new rules that could restrict vessels considered hostile from using the strategically important waterway, raising fears of potential disruptions to global energy supplies.


The rise in crude prices has renewed concerns over inflation, prompting investors to reassess expectations for global monetary policy ahead of the closely watched U.S. non-farm payrolls report due later in the day.

Reuters reported that economists expect U.S. job growth to have accelerated in July, a sign that the labour market remains resilient. A stronger-than-expected employment report could reinforce expectations that the U.S. Federal Reserve will keep interest rates higher for longer as it continues to prioritise inflation control.

Healthcare outperforms, insurers lag
Sectoral performance across Europe was mixed, with healthcare stocks emerging as the strongest performers. The healthcare index climbed 1.3%, led by Danish biotechnology company Genmab, whose shares surged 7.2% after the cancer drugmaker reported stronger first-half revenue and raised its full-year financial guidance.

In contrast, insurance stocks weighed on the broader market, with the sector falling 0.6%.

German reinsurer Munich Re declined 3.7% despite reporting a 6% increase in second-quarter net profit, outperforming market expectations that had pointed to a decline. Investors appeared to focus on valuation concerns and profit-taking following the earnings release.

Markets eye key U.S. economic trigger
Investors are expected to remain cautious through the session as attention shifts to the U.S. employment data, which could significantly influence expectations for the Federal Reserve's policy path in the coming months.

Alongside the jobs report, developments in the Middle East and movements in crude oil prices are likely to remain key drivers of market sentiment, with higher energy costs posing potential risks to inflation and corporate profitability.

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