MILAN, Italy —  European shares inched up on Friday, underpinned by gains among drugmakers and some fresh dealmaking activity, while luxury group Richemont fell on a disappointing earnings update.

Cartier owner Richemont fell 5.6 percent, leading losers in Europe after saying the trading environment would stay volatile after net profit fell below expectations but sales growth picked up towards the end of its fiscal year to March.

Baader Bank analyst Andreas von Arx said results were mixed and kept his hold rating on the stock, which has enjoyed a strong rally since the start of the year.

In spite of the disappointing update from the heavyweight luxury group, results in Europe have been surprisingly strong with 67 percent of companies beating earning expectations.

Combined with easing political worries that have attracted a wave on inflows, especially from the United States, strong earnings have helped the pan-European STOXX 600 hit 21-month highs earlier in the week.

European equity funds pulled in more than $6 billion in net inflows in the week following the second-round of the French presidential election, a record for weekly flows, according to Citi and fund tracker EPFR Global.

By 0926 GMT the STOXX and euro zone blue chips were both flat, while the UK's FTSE 100 added 0.2 percent, supported by a 4.8 percent surge in AstraZeneca following positive trial results from a key immunotherapy drug.

Gains in the British drugmaker helped lift Europe's healthcare index up 0.8 percent, making it the biggest boost to the STOXX.

Elsewhere activity was driven by fresh dealmaking activity.

United Internet rose 9 percent, after saying that it planned to buy a majority stake in mobile operator Drillisch in a deal which will boost competition at the low end of the crowded German telecoms market.

Drillisch soared above the bid price. Alpha Trading portfolio manager Stefan De Schutter said that reflected the fact that Drillisch will pay a dividend before the bid as well as the chance that United may increase the stake in the future.

German telecoms Deutsche Telekom and Telefonica Deutschland rose 3.1 and 7.7 percent, respectively.

Havas soared 9.5 percent after Vivendi announced an offer to buy Group Bollore's 60 percent stake in the French advertising group in a $2.6 billion deal.

Schibsted rose 7.5 percent after revenues at the Norwegian media firm kept its guidance and posted revenues above analyst expectations.

Italian lender Banco BPM rallied 8.3 percent after its quarterly net profit came in well above expectations.

Banco Popular fell 3 percent after the struggling Spanish lender denied it was urgently seeking to be taken over. The stock was the biggest faller in Madrid on Thursday when the IBEX suffered its biggest one-day loss in six months.

Credit Suisse downgraded Spanish equities to underperform on Friday.

By Danilo Masoni.