EUROPE MARKETS: Europe Stocks Poised For Seven-day Winning Streak

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Upbeat growth data from China and a strong prior-day session on Wall Street helped lift European stock markets on Friday, with the benchmark index on track for a seventh straight day in positive territory.

The Stoxx Europe 600 index climbed 0.6% to 317.93, flirting with the highest level in more than five years.

On the week, the benchmark was looking at a 2% gain, even after a period of uncertainty about the U.S. government shutdown and debt ceiling. Read: Obama says there are no winners from fiscal battle

"Now that we have the U.S. out of the way, markets will focus on two very important issues. First, that the world-wide economy is improving, which was evidenced overnight with Chinese GDP data. And second, that the big flow of money is very good and money is still flowing into equities. I am fairly optimistic going into 2014 that markets will remain well supported," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

"We saw the German election went well, tapering [in the U.S.] has likely been put off until the of the year or the beginning of 2014, we will still have discussions in Washington, but at least postponed until the beginning of next year, earnings are decent and economic figures," added. "We're telling clients to buy equities right now."

Among notable movers on Friday, shares of L'Oréal SA gained 3.3% after Shiseido Co. said it has entered exclusive talks to sell two of its Paris-based cosmetics businesses to the bigger French rival.

Shares of Anglo American PLC fell 1.2% after the miner released a mixed production update for the third quarter with copper, diamond and nickel output up, but iron ore down.

OMV AG dropped 2.1% after the oil refiner said political unrest in North Africa took its toll on hydrocarbon-production levels in the third quarter.

China growth

For the broader European markets, investors were inspired by news from China, where data showed the economy expanded 7.8% in the third quarter. The reading was higher than some analyst estimates, but in line with average expectations from a Reuters survey of economists.

However, statistics for September suggest a mild slowdown is under way, with growth for industrial production, retail sales and construction activity all slipping. "While one should always be a bit skeptical about Chinese growth data, the current picture is supported by a rise in industrial production as well as development in electricity production. Interestingly, the current activity data are stronger than the PMIs suggest," analysts at Danske Bank said in a note.

"This is not the first time this has happened, though, and it may indicate some upside risk to PMI in coming months. We look for growth to keep a robust pace in coming quarters but to lose steam during 2014," they added.

Analysts at Nomura were more bearish on the Chinese growth story and said they expect GDP growth to slow to 7.5% year-on-year in the fourth quarter and 6.9% in 2014.

In the U.S., the S&P 500 index (SPX) managed a record finish on Thursday as Wall Street turned from the latest fiscal drama on Capitol Hill to corporate earnings.

U.S. stocks traded mixed on Friday, but with the S&P extending its record.

In Europe, Germany's DAX 30 index added 0.3% to 8,841.67. France's CAC 40 index picked up 0.9% to 4,276.93, while the U.K.'s FTSE 100 index rose 0.6% to 6,615.18.

Outside the major indexes, shares of Svenska Cellulosa AB jumped 6.4% after the paper and hygiene-products producer reported a rise in third-quarter profits and beat expectations.

Yara International ASA added 4.3% after the Norwegian firm said fertilizer deliveries were up 17% in the third quarter due to higher sales in Brazil.

Schindler Holding Ltd. climbed 4.5% after announcing a share-buyback program.

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