A graph of the German share price index DAX is displayed at the stock exchange in Frankfurt, Germany, December 3, 2025. REUTERS/Staff

By Anastasiia Kozlova

Dec 5 (Reuters) - European shares steadied on Friday after three sessions of gains put them on track for a weekly rise, while investors awaited a key U.S. inflation reading.

The pan-European STOXX 600 index rose 0.2% to 580.16 as of 0853 GMT, near a three-week high.

Germany’s DAX and France’s CAC 40 added 0.5% and 0.2%, respectively.

Investors awaited the delayed U.S. personal consumption expenditure report for September, due later on Friday, which could shape the Federal Reserve’s approach to monetary policy easing.

Recent data and dovish remarks from some Fed policymakers have strengthened expectations for a rate cut next week.

"While it will help us to gain a more complete picture of the U.S. inflation landscape, this data is very backward looking so as long as it is roughly in line with expectations, the rally could continue," said Kathleen Brooks, research director at XTB.

"The last two weeks of the year are typically strong for equities, and there could be a fear of missing out on some extra gains before year end."

In Europe, industrial stocks jumped 0.4%, the biggest boosts to the index, while basic resources advanced 1.1%, the biggest gainers on the index, after copper prices hit a record high.

Citigroup set a 2026 target of 640 for the benchmark index and upgraded the auto, industrials, chemicals, and basic resources sectors, citing fiscal tailwinds in 2026.

Automobile stocks were among the biggest gains on the index on Thursday, after BofA Global Research upgraded some stocks within the sector.

Swiss Re fell 5% after the reinsurer announced its targets for 2026, below analysts' expectations. Big Yellow Group dropped 5.4% after terminating talks of a potential deal with Blackstone.

Ocado topped the index with a 8.5% rise. The online supermarket technology firm will receive a one-off $350 million cash payment from Kroger as the U.S. grocer decided to close three robotic warehouses and cancel a planned facility.

UCB gained 4.5% after the biopharmaceutical group raised its guidance for 2025.

Markets will also keep an eye on the pensions bill vote in the German parliament, that will test Chancellor Friedrich Merz's coalition control, with its passage likely relying on opposition abstention after a revolt by younger conservatives.

(Reporting by Anastasiia Kozlova; Editing by Mrigank Dhaniwala and Nivedita Bhattacharjee )