European stocks closed higher on Friday as oil shares stormed ahead, but the day's rally lost some steam as weak US data pushed Wall Street into the red. The FTSEurofirst 300 index of top European shares ended up 0.8 percent at 859.58 points.
But the benchmark index has lost more than 40 percent so far this year as a spreading financial crisis has brought the world economy onto the brink of recession. Britain's leading share index closed 1.53 percent higher, as hefty falls seen earlier in the week attracted bargain hunters and investors awaited the outcome of a meeting of world leaders over the weekend.
The FTSE 100 ended 63.76 points higher at 4,232.97, after closing down 12.81 points on Thursday. However, the index is still down 131.99 points over the week. Chris Bennett, senior trader at ChoiceOdds, said: "Having seen the highs of the day, it appears that the bargain hunters have had their fill of cheaply priced stocks.
"With no good news on the horizon there appears little to suggest that the markets will go any way other than down next week." Among oil shares, Total, BP and Royal Dutch Shell all rose between 3.2 percent and 3.6 percent. Among the day's top percentage gainers, shares in French oil services Technip added 11.3 percent, one day after the company posted better-than-expected quarterly profits.
Major US stock indexes fell, retreating from a big surge on Thursday and after a government report showed sales at US retailers suffered a record drop of 2.8 percent in October. Peter Dixon, an economist at Commerzbank in London, said: "Everybody expected a bad number but it's the magnitude of the deterioration that worries people.
"You'd have to be a brave investor to be a bargain hunter now. There are bargains out there, but you'd have to be prepared to hold them for a considerable amount of time." Across Europe, Britain's FTSE 100 put on 1.5 percent, Germany's DAX rose 1.3 percent and France's CAC-40 put on 0.7 percent.
Germany's Continental rocketed 27 percent after ball-bearings maker Schaeffler said it plans to file for European Commission approval on a previously announced take-over of just under 50 percent of the tyre and auto parts specialist. Analysts said the announcement was helping shore up confidence in the company, but speculation also circulated of a possible short-squeeze driving shares up.
Rumours that Porsche might be considering taking over Conti along with Schaeffler were denied by the automaker. Banks staged a mixed performance. On the upside, HSBC, Standard Chartered and BNP Paribas added between 1.3 percent and 6.4 percent.
But Dexia, one of the day's biggest percentage fallers, lost 11.5 percent after posting a quarterly loss of 1.544 billion euros. It said it had agreed to sell its FSA insurance business to Assured Guaranty. G20 leaders headed to Washington on Friday for a summit aimed at seeking solutions to the world's biggest financial crisis in decades.
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