UKX FTSE 100 Index

By Carla Mozee and Sara Sjolin, MarketWatch

Trump to talk drug prices on Friday

European stocks eked out gains on Friday, ending higher for a seventh straight week to log its longest weekly winning run since 2015.

Italian and U.K. stocks led the markets higher, with politics and miners in focus, respectively.

How markets were moving

The Stoxx Europe 600 index ended 0.1% higher at 392.40, after swinging between small gains and losses throughout the session.

The pan-European index gained 1.4% for the week, matching a seven-week run of advances that ended in March 2015.

Among country-specific indexes, Italy's FTSE MIB index picked up 0.5% to 24,159.34. That index on Thursday slumped 1% as euroskeptic parties moved closer to forming a coalition government (http://www.marketwatch.com/story/italian-antiestablishment-groups-close-to-reaching-coalition-deal-2018-05-10).

Germany's DAX 30 index fell 0.2% to 13,001.24 on Friday, and France's CAC 40 index lost 0.1% to close at 5,541.94. The U.K.'s FTSE 100 index ended 0.3% higher at 7,724.55, and secured its longest weekly winning streak since 2005 (http://www.marketwatch.com/story/ftse-100-seeks-firm-direction-but-on-course-for-7th-weekly-advance-2018-05-11).

The euro was trading at $1.1949, up from $1.1917 late Thursday in New York. The shared currency has fallen about 0.1% this week, on course for a fourth consecutive weekly loss.

What's driving markets

Metals producers led advancers Friday, with the move sending the Stoxx Europe 600 Basic Materials index up 1.8%. In that group, shares of ArcelorMittal SA (MT) climbed 2.3% after the steelmaker logged a rise in quarterly profit (http://www.marketwatch.com/story/strong-steel-prices-boost-arcelormittal-profit-2018-05-11), due in part to higher steel prices.

But health care shares lagged behind before a speech expected later Friday by U.S. President Donald Trump about drug prices. His administration has said it would issue several proposals to lower prescription drug prices (http://www.marketwatch.com/story/five-things-to-expect-again-from-president-trumps-upcoming-drug-price-speech-2018-04-19) and pass discounts to patients. The Stoxx Europe 600 Health Care index fell 0.7%.

Investors will keep tabs on developments from Italy where leaders of Italy's far-right League party and populist 5 Star Movement on Thursday moved closer to creating a coalition government, potentially putting an end to more than two months of political gridlock.

That coalition would create one of Europe's biggest euroskeptic alliances, and there's concern that may hurt Italy's relationship with the European Union and throw the Italian economy into disarray.

The yield on 10-year Italian government bonds fell 6 basis points to 1.870%, according to Tradeweb. Yields fall when prices rise. The 10-year yield this week hit its highest since mid-March as investors sold off Italian debt, signaling investors are becoming more nervous about the country's finances. In turn, investors demand a higher risk premium to buy the bonds.

European Central Bank President Mario Draghi gave a speech in Florence (https://www.ecb.europa.eu/press/key/date/2018/html/ecb.sp180511.en.html) on "risk-reducing and risk-sharing in our Monetary Union," backing calls to complete a banking union to make the financial system more stable.

What are strategists saying?

"Equities continue to exhibit signs of strength, buoyed by a strong earnings season and valuations that have reminded investors of the compelling fundamental outlook," said Chris Beauchamp, chief market analyst at IG, in a note

"Investors should take heart from the resilience equities have shown as geopolitical tensions rise, and signs that stock can weather the storms of Iran, North Korea and others should encourage fresh flows into equity markets," he added.

Stock movers

Sika AG (SIK.EB) jumped 8.3% after the founding family of the Swiss specialty chemicals maker and Compagnie de Saint-Gobain SA (SGO.FR) agreed to end their long-running legal dispute with Sika's management. French building materials company Saint Gobain will give up its fight to take control of Sika, but will purchase Schenker-Winkler Holding AG (http://www.marketwatch.com/story/saint-gobain-sika-and-burkard-family-end-dispute-2018-05-11) from the Burkard family for 3.22 billion Swiss francs ($3.21 billion).

John Wood Group PLC (WG.LN) bounced up 10% as the energy-services company posted an upbeat first-quarter trading statement (http://www.marketwatch.com/story/wood-group-sees-upbeat-trading-momentum-in-1q-2018-05-11).

Daily Mail & General Trust PLC (DMGT.LN) rose 1.3%, but had rallied as much as 9.4% earlier in the day. The gain came after Silver Lake Management Company agreed to buy ZPG, in which DMGT is the biggest shareholder. ZPG shares ended 31% higher.

Roche Holding AG (ROG.EB) lost 1.7% in Zurich after the drugmaker on Thursday--when Swiss markets were closed for a holiday--released negative colorectal cancer trial results for its Tecentriq drug.

(END) Dow Jones Newswires

May 11, 2018 12:14 ET (16:14 GMT)

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