European shares edge up on healthcare, but oil and Middle East risks weigh

European equities opened slightly higher on Friday, with healthcare stocks providing the main lift, though rising crude prices and fresh geopolitical worries in the Middle East kept gains in check.

The pan-European STOXX 600 index added 0.2% to 659.59 points in early trade, putting it on course for a fourth straight weekly advance. The optimism that pushed markets to record levels earlier in the week has cooled as investors reassess the inflationary impact of higher energy costs.

Brent crude extended its climb, trading at $83.29 a barrel, after Iran — in coordination with Oman — proposed barring vessels deemed hostile from the Strait of Hormuz and imposing heavy fines on those violating the suggested rules. The strait is a critical chokepoint for global oil shipments.

Attention now shifts to the U.S. payrolls report due later in the day, which is expected to show accelerated job growth in July. A strong reading would underline the resilience of the labour market and give the Federal Reserve room to keep its focus on inflation.

On the earnings front, insurers were the biggest drag, falling 0.6% after Munich Re slipped 3.7% despite posting a 6% rise in second-quarter net profit, which beat expectations of a decline.

Healthcare was the standout sector, up 1.3%, led by Danish cancer drugmaker Genmab, which jumped 7.2% after reporting higher first-half revenue and raising its full-year guidance.