Investing.com - European stocks were higher on Friday, as markets re-opened after the New Year Holiday with downbeat comments by European Central Bank President Mario Draghi and as investors awaited the release of euro zone manufacturing data due later in the trading session.
During European morning trade, the EURO STOXX 50 rose 0.32%, France’s CAC 40 added 0.26%, while Germany’s DAX 30 eased up 0.08%.
European equities were boosted after ECB President Mario Draghi said the risk of deflation in the euro zone cannot be excluded, signaling the possibility of large-scale quantitative easing measures.
"We are in technical preparations to alter the size, speed and composition of our measures at the beginning of 2015, should this become necessary, to react to a too-long period of low inflation", Draghi told German newspaper Handelsblatt.
Meanwhile, investors remained cautious as Greece formally dissolved parliament on Wednesday after Prime Minister Antonis Samaras failed earlier in the week to persuade lawmakers to back his candidate for head of state, casting the country's international bailout into doubt.
Parliamentary elections were set for January 25, almost 18 months before the current coalition's term was due to end.
Earlier Friday, research group Markit said that Spain's manufacturing purchasing managers' index ticked down to 53.8 this month from a reading of 54.7 in November.
Financial stocks were broadly higher, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) rallied 1.10% and 1.46%, while Germany's Commerzbank (XETRA:CBKG) and Deutsche Bank (XETRA:DBKGn) climbed 0.50% and 0.80%.
Among peripheral lenders, Italy's Unicredit and Intesa Sanpaolo jumped 1.45% and 1.78% respectively, while Spanish banks Banco Santander and BBVA advanced 0.91% and 1.74%.
In London, commodity-heavy FTSE 100 inched up 0.06%, supported by gains in the mining sector.
Shares in Glencore Xstrata (LONDON:GLEN) climbed 0.58% and Rio Tinto advanced 0.62%, while Bhp Billiton gained 0.78% and Fresnillo (LONDON:FRES) rallied 1.21%.
Energy companies were also broadly higher on the back of rising oil prices. BP (LONDON:BP) saw shares rise 0.35% and Tullow Oil (LONDON:TLW) jumped 1.37%, while Petrofac led gains on the index with shares surging 2.70%.
In the financial sector, stocks were mostly on the upside as Barclays added 0.27% and HSBC Holdings (LONDON:HSBA) gained 0.42%, while Lloyds Banking (LONDON:LLOY) climbed 0.59%. The Royal Bank of Scotland (LONDON:RBS) underperformed however, with shares tumbling 1.27%.
RBS was hit by reports it may be fined more than £5 billion over its involvement in the sale of toxic mortgage-backed debt in the U.S.
In addition, U.K. taxpayers were left with a £10 billion loss on their stake in RBS shares at the end of 2014, as the shares obtained in a bailout for 502p each ended the year trading at 394p.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.58% climb, S&P 500 futures signaled a 0.56% gain, while the Nasdaq 100 futures indicated a 0.51% increase.
Later in the day, Markit was to release final data on euro zone manufacturing activity. The Institute for Supply Management was also to publish data on U.S. manufacturing activity.