European shares rise as French stocks recover; all eyes on Warsh

On Friday, European shares edged higher as French stocks rebounded from the previous day's drop, with the attention of investors shifting to Federal Reserve Chair Kevin Warsh's speech at Jackson Hole. The pan-European STOXX 600 index gained 0.5%, reaching 655.33 points at 0708 GMT, on track for a slight weekly increase after two prior weekly declines.

French stocks led the regional bourses, with the CAC 40 index up about 1.1%, following a one-month low the day before. French lenders Societe Generale, BNP Paribas, and Credit Agricole surged between 0.8% and 1.4% after sliding the day before due to concerns over the political and fiscal outlook ahead of the spring presidential election.

EssilorLuxottica soared 3%, outperforming the French blue-chip index, after announcing a share buyback plan; luxury stocks also rose 2.3%. French GDP growth was revised to flat in the second quarter from a preliminary 0.2% expansion, hinting at weaker momentum in the euro zone's second-largest economy. Fitch is set to review France's rating later in the day, a year after downgrading the country to a record low A+.

The focal point for Friday will be Warsh's Jackson Hole speech, as investors eagerly await to see if the Fed chair diverges from his preference for minimal policy signaling and offers fresh hints about inflation, interest rates, and recent bond market volatility. The main event will be Warsh's Jackson Hole speech, with investors keen to gauge whether he deviates from his inclination to limit policy cues and provides new insight into inflation, interest rates, and the recent turbulence in bond markets.