European stocks open higher driven by financial sector gains

European stocks opened higher on Friday, supported by gains in financial stocks, though the main index was on track for a weekly decline after investors tempered their expectations for an interest rate cut following recent comments from policymakers.

As of 0818 GMT, the European STOXX 600 index was up by 0.4 percent, extending the gains from the previous session. Notably, euro zone bank shares rose by 0.6 percent, buoyed by a roughly three percent surge in KBC Group after Morgan Stanley upgraded the rating of the Belgian integrated bancassurance group.

Despite these positive moves, hawkish comments from European Central Bank policymakers led traders to scale back their bets on an interest rate cut, contributing to the benchmark’s weekly loss.

In terms of economic data, German producer prices in December fell more than anticipated, dropping by 8.6 percent year-on-year. Nevertheless, the DAX 40 index of leading stocks increased by 0.4 percent.

Among the notable stock movements, Teleforming shares surged by 4.7 percent after Stifel Investment Company upgraded its rating on the telecommunications services company’s stock.