European Markets React to U.S. Election Uncertainty and Energy Stock Rally

European shares rose on Friday with a rally in energy stocks but faced their worst week in months due to the tense U.S. presidential election. The STOXX 600 climbed 0.5% after dropping 1% previously. Energy stocks led the gains amidst geopolitical tensions, while tech investments stirred investor concerns.

European shares experienced a rise on Friday, driven largely by a surge in energy stocks. However, despite this upward movement, markets remain on course for their most significant weekly decline in nearly two months. The impending U.S. presidential election, which remains tightly contested, has left investors feeling uneasy.

The pan-European STOXX 600 index increased by 0.5% to 508.05, following a more than 1% drop in its previous session. The index is on track to register roughly a 2% decrease this week, marking the second straight week of declines. Investors are keeping a close watch on the U.S. election outcome, a race seen as too close to predict, with Republican Donald Trump and Vice President Kamala Harris neck-and-neck in recent polls.

A wave of uncertainty has driven investors to safe-haven assets like the U.S. dollar and gold, which reached a record high this week. The energy sector provided the biggest lift for the index, gaining 1.4% amid reports of potential geopolitical events. Meanwhile, Reckitt's shares surged 10% following a favorable ruling, while the travel and food sectors saw declines.

(With inputs from agencies.)