European stocks turn higher to end at new multi-month highs

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European stocks turned higher Friday to close at the highest level in 22 months, driven by reports of progress between the U.S. and China on trade talks.

Showing the sensitivity of European equities to trade-war developments, the Stoxx Europe 600 ended with a gain of 0.2% to 398.01

The German DAX rose 0.17% to 12894.51, the French CAC 40 increased 0.67% to 5722.15 while the U.K. FTSE 100 fell 0.05% to 7324.47.

Reports of a high-level call between U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and China Vice Premier Liu He gave a lift to stocks in the U.S. and Europe. The spillover from the U.S.-China trade war has hit Europe, and in particular German, growth.

The Ifo business climate index for Germany stayed unchanged in October at a reading of 94.6, which was slightly higher than economist expectations but also not much above the 7-year-low registered in August. A survey released Friday by the European Central Bank of professional forecasters reported lower expectations both of inflation and GDP growth.

Earnings news continued to flood in. According to Goldman Sachs, earnings have surprised to the upside by 1.8% of the 76 companies that have reported in Europe.

Electrolux shares rose 6% as its 32% slump in third-quarter operating profit wasn't as steep as forecast. The maker of refrigerators and washing machines said price increases have been able to offset the hit from raw materials increases, trade tariffs and currency.

Shares of Kering surged nearly 9%, the strongest one-day percentage gain for the company in two years, as the French luxury goods group reported 11.6% comparable-sales growth in the third quarter, driven by sales growth at Gucci.

Shares of toilet paper and diaper maker Essity jumped nearly 6%,as it reported organic sales increased 5.9% and its adjusted operating margin rose 2.6 percentage points in the third quarter.

Shares of Anheuser-Busch InBev dropped 11%, the biggest drop in over a decade, as the brewer reported flat EBITDA on a comparable basis during the third quarter, with revenue up 2.7% and volume growth down 0.5%. Anheuser-Busch InBev said it expects the additional headwinds faced in the third quarter will continue into the fourth quarter, as it now forecasts "moderate" growth in EBITDA for the year versus a previous characterization of "strong."