European markets open higher, rounding off winning week

The pan-European Stoxx 600 index was 0.3% higher, led by autos stocks, up 1.2%

European markets opened higher Friday, rounding off what’s set to be a winning week for global stocks.

The pan-European Stoxx 600 index was 0.3% higher at 7:10?am GMT, led by autos stocks, up 1.2%.

The regional benchmark is up more than 2% so far this week, putting it on course for its best performance since May 10.

U.S. stocks have also posted strong gains, with a big boost coming Thursday when weekly jobless claims fell and U.S. retail sales data was much stronger than forecasts had suggested.

That further signalled to investors that the concerns over a U.S. recession, which contributed to the sharp global sell-off at the start of the month, are overblown. Along with ripple effects from Japanese monetary policy, analysts say part of the volatility may be explained by a historical August trend, when trade tends to be shallower.

The Stoxx 600 and Wall Street’s S&P 500 remain short of the levels they started the month at, but steady gains through the week have recovered losses from the recent rout.

On the data front on Friday, U.K. retail sales showed a bounce back from a 0.9% drop in June to 0.5% growth in July. Sales volumes were 1.1% higher in the three months to July.

Alex Kerr, U.K. economist at Capital Economics, said in a note Friday that the retail uptick was not broad-based, with sectors like food, clothing and household goods struggling.

We continue to think that growing real incomes, as inflation declines, should mean consumer spending growth accelerates over the rest of this year, Kerr added.

It comes after U.K. inflation showed an uptick to 2.2% in July, a lower rise than expected, while the economy logged 0.6% growth in the second quarter.

The British pound was 0.24% higher against the U.S. dollar at $1.288 on Friday morning, its highest for two weeks. Sterling was also marginally up against the euro.