The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 7, 2025. REUTERS/staff

By Twesha Dikshit

(Reuters) -European stocks edged higher on Friday, led by upbeat corporate earnings and a jump in Novo Nordisk shares, and were set for their biggest weekly gain in twelve.

Novo Nordisk, rose 4.6% after rival Eli Lilly's weight-loss pill's late-stage study showed that it lagged Novo's injectable obesity treatment Wegovy.

The pan-European STOXX 600 index was up 0.2%, taking its weekly gains to 2.1% as of 0840 GMT. Most regional bourses were in the green, except Germany's blue-chip DAX down 0.3%.

A largely upbeat corporate results and firming bets of more interest rate cuts from the Federal Reserve have helped European stocks rise from five-week lows last Friday.

Of the 198 companies in the STOXX 600 that reported earnings through Tuesday, 53% exceeded analysts' estimates, according to data compiled by LSEG.

"Equities have overall held up fairly well ... earnings have been on the whole decent and maybe because you're getting greater certainty around trade," said Richard Flax, chief investment officer at Moneyfarm.

"The underlying question as we kind of head into the next few months is will that stagflationary kind of narrative persist and if it does, will it begin to impact more on equities."

Munich Re shares fell 7.4% and ranked among top decliners on the benchmark index after the German reinsurer trimmed its fiscal-year outlook for insurance revenue.

Insurance stocks declined 1.8%, a day after hitting a record high.

Shareholders in Germany's Thyssenkrupp are set to vote on a spin-off of its defence division, sending its shares rising 2.5% with European spending on defence raising expectations for the company's value.

Lotus Bakeries' shares added 7% after the Biscoff brand owner reported strong first-half results with the company on track for its best year in over a year if gains hold.

Bechtle's shares jumped 13.8% to the top of the benchmark after the German IT service provider confirmed its full-year guidance.

Global markets got a lift after U.S. President Donald Trump said he will nominate Council of Economic Advisers Chairman Stephen Miran to serve out the final few months of a newly vacant seat at the Fed, while the White House continues its search for a successor to Fed Chair Jerome Powell, whose term ends May 2026.

Trump has tried to pressure Fed officials including Powell to cut interest rates. By appointing Miran to the Fed, even temporarily, he may gain a more direct way to pursue a looser monetary policy.

(Reporting by Twesha Dikshit and Medha Singh; Editing by Harikrishnan Nair and Sonia Cheema)