MILAN: European shares were set to chalk up healthy weekly gains on Friday, snapping a three-week losing streak as earnings updates continued to impress, and volatility and jitters over rising inflation eased.
Gains in the energy sector on rising oil prices and solid reports from large-cap companies including Schneider, Eni and Renault lifted the STOXX 600 index 0.9 percent.
The pan-European benchmark is up 3 percent so far this week, set for its best week since December 2016, but still down around 6 percent from the 2-1/2-year peak it hit in January.
Among country benchmarks, the UK's FTSE was up 0.6 percent and Germany's DAX added 0.8 percent, while Italy's FTSE MIB outperformed, up 1.2 percent.
This week's recovery follows a turbulent start to February, when worries that rising US inflation could trigger faster interest rate hikes caused a global sell-off in equities.
The euro zone's volatility index dipped and remained well below the 19-month peak it reached earlier this month.
"The reason for the change in sentiment may well be down to the fact that the overall global economic picture continues to remain fairly positive," Michael Hewson, chief market analyst at CMC Markets, wrote in a note.
According Thomson Reuters data, European fourth-quarter earnings are seen rising 14.6 percent, a big upwards revision from last week's 11 percent growth forecast and following 15 weeks characterised by a string of downgrades.
That brought Europe to just below the 14.8 percent growth rate expected for the S&P 500, though earnings beats in the US stand at 78 percent versus 50 percent in Europe.
On the day, the biggest gainer in Europe was Vopak , up 14.9 percent after earnings at the Dutch oil and chemical storage firm fell less than expected.
French satellite operator Eutelsat soared 5.8 percent following its update. Even though its first-half core profit fell 7.4 percent, weighed down by slowing demand in its video division, one trader said net profit beat expectations and cost-cutting surprised positively.
Food giant Danone's shares rose 1.2 percent after it published 2017 results.
Swedish defence firm Saab plummeted 10 percent, leading losers in Europe after it posted fourth-quarter operating earnings below analysts' forecasts and proposed a smaller dividend hike than expected.
Air France was another top faller, down 5.8 percent. Its shares reversed course after a positive open that traders linked to the airline's positive comments on pricing.
Roche gained 0.9 percent after the Swiss drugmaker said it would buy the rest of Flatiron Health for $1.9 billion to speed development of cancer medicines.
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