European markets closed on a firm note on Friday, as stocks saw some spirited buying, tracking a recovery in the U.S. market on hopes the Fed is monitoring the volatile swings witnessed by the global markets due to aggressive monetary policy tightening.

A drop in government bond yields and data showing the U.K. economy has not fallen into a recession helped lift sentiment.

Currency markets calmed, with the euro and sterling hitting new one-week highs after the British government agreed to meet with the country's independent budget experts.

Despite posting strong gains for the session, most of the major markets in the region recorded sharp losses for the month and the third quarter.

The pan European Stoxx 600 climbed 1.3%. Germany's DAX gained 1.16%, France's CAC 40 surged 1.51%, and the U.K.'s FTSE 100 advanced 0.18%, while Switzerland's SMI closed higher by 1.37%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Spain, Sweden and Turkiye closed with sharp to moderate gains.

Portugal and Russia edged up marginally, while Poland ended weak.

In the UK market, Barratt Developments, Unite Group, Persimmon and Segro gained 5 to 6%.

Burberry Group, Berkeley Group Holdings, St. Jame's Place, M&G, Auto Trader Group, Hargreaves Lansdown, Dechra Pharmaceuticals, Taylor Wimpey, Prudential, Tesco, Melrose Industries and B&M European Value Retail gained 3 to 4.5%.

BAE Systems, Unilever, Reckitt Benckiser, Centrica, Glencore and British American Tobacco declined sharply.

In the German market, Vonovia, Siemens Healthineers, Deutsche Wohnen, Zalando, Fresenius, HeidelbergCement, Siemens, Symrise, SAP, HelloFresh, Covestro and Sartorius gained 2 to 6%.

Puma drifted down more than 5.5%. Adidas, Porsche Automobil and Volkswagen also ended sharply lower.

In Paris, Unibail Rodamco surged more than 6%. Teleperformance, Dassault Systemes, Saint Gobain, WorldLine, CapGemini, Publicis Groupe, Faurecia and Michelin gained 3 to 4.5%.

Data released by the Office for National Statistics showed the UK economy expanded in the second quarter after a revision to the services output, but growth remained below the pre-pandemic level.

Gross domestic product grew 0.2% sequentially, which was revised up from a first estimate contraction of 0.1%. Nonetheless, the pace of growth was weaker than the 0.7% expansion posted in the first quarter.

Moreover, the ONS estimated that the level of real GDP was 0.2% below its pre-pandemic level, downwardly revised from the prior estimate of 0.6% above the pre-coronavirus period.

On a yearly basis, the economy grew 4.4% in the second quarter, up from the initial estimate of 2.9%.

Eurozone inflation advanced to 10% in September from 9.1% in August, official data from Eurostat showed. The rate exceeded economists' forecast of 9.7%.

Consumer price inflation in France slowed to a 4-month low of 5.6% in September from 5.9% in August, data from the statistical office Insee showed. Economists had forecast inflation to remain stable at 5.9%.

Meanwhile, industrial producer price inflation in the home market accelerated further to 29.5% in August from 27.6% in July, another data from Insee showed. Month-on-month, producer prices climbed 2.7% in August, after rising 1.9% in the preceding month.

Germany's unemployment increased in September albeit at a slower pace, data from the Federal Labor Agency revealed.

The number of people out of work increased 14,000 after climbing 26,000 in August. This was also smaller than the expected rise of 20,000.

At the same time, the unemployment rate held steady at 5.5% in September, as expected.

U.K.'s house price index climbed 9.5% year-over-year in September, slower than the 10.5% rise in August, a report from the Nationwide Building Society showed.

(Source:RTT News)