PARIS: European shares eked out gains on Friday, with French stocks logging their biggest daily rise in three weeks as investors factored in a potential budget despite ongoing political uncertainty, while also parsing an upbeat US jobs report.

The pan-European STOXX 600 was up 0.1%, logging its seventh consecutive day in advances and its strongest weekly performance in ten.

French assets saw a relief rally after President Emmanuel Macron said he would appoint a new prime minister in the coming days whose top priority will be getting a 2025 budget adopted by parliament, after the government was toppled by lawmakers.

The country’s benchmark CAC 40 index rose 1.3% to touch a fresh three-week high. The index also logged its steepest weekly rise in ten, trimming its annual drop to 1.5% from over 3% earlier in the week. French bond yields also dropped.

However, Andrew Kenningham, chief Europe economist at Capital Economics, struck a cautious tone as he said, “The key point as far as French politics is concerned is that there is no realistic prospect of a stable government being formed with a mandate to address France’s fiscal problems.”

“And there is a risk that the current deadlock drags on and that the next legislative elections... don’t solve the problem.”

European luxury stocks jumped 3% and touched a two-month high, with Italy’s Moncler among the top gainers with a 5% rise after Goldman Sachs upgraded its shares to “buy”.

Germany’s DAX closed higher by 0.1% to clinch an all-time high and logged its biggest one-week rise in over two months even as political uncertainty prevailed.

Across the Atlantic, data reflected a resilient jobs market in the US, and investors priced in that the Federal Reserve is on track to cut rates in December.

Among other movers, Vivendi rose 1.9%. The French media conglomerate will seek shareholder approval on Monday for a proposed break-up of the group.

Direct Line rose 5.6% after the British insurer said it was set to recommend a sweetened 3.61 billion pound ($4.60 billion) cash-and-stock takeover by Aviva, if the bigger rival makes a formal offer.

Puig Brands fell 3.5%, having shed as much as 9% earlier, after the Spanish cosmetics company said its Charlotte Tilbury brand was conducting a global withdrawal for select batches of its make-up setting spray.

BMW rose 2.7% after Jefferies upgraded the German automaker’s stock to “buy” from “hold.”