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European shares climb after Wall Street bounce, caution prevails

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Traders raise their glasses at the stock exchange in Frankfurt
Traders raise their glasses at the stock exchange in Frankfurt   -   Copyright  REUTERS/Ralph Orlowski
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European shares edged up on Friday, buoyed by a bounce on Wall Street as a turbulent week drew to a close and investors licked their wounds after the region's benchmark STOXX 600 sank to its lowest level since U.S. President Donald Trump's election.

The STOXX 600 <.STOXX> was up 1 percent by 0827 GMT with Britain's FTSE 100 up 1.2 percent. The pan-European benchmark hit a low of 327.34 points on Thursday, its lowest level since Nov. 9, 2016.

Volumes remained very light with many investors away for the Christmas holidays. Just 5 percent of the 30-day average daily volume was traded in the first 30 minutes, usually the busiest.

The oil sector was the top gainer in early deals as crude prices clawed back some of their lost ground. Europe's oil and gas index <.SXEP> jumped 1.5 percent.

Aker BP , John Wood Group , Subsea 7 , and Premier Oil all gained 2.6 to 5.1 percent.

Christmas week has been a wild ride for investors, with U.S. and European stocks suffering significant losses on Dec. 24, but Wall Street's recovery rally on Thursday to gains of more than 1 percent helped lift sentiment in Asia and Europe.

Threats lurked still, though, with a U.S. government shutdown continuing.

The most notable mover in illiquid trading was UK inkjet printer technology maker Xaar , whose shares fell 15.8 percent to the bottom of the small-cap index <.FTSC> after a profit warning.