European Stocks Close Higher, Oil Firms Rally

European stock markets closed stronger on Friday as oil shares tracked record crude prices and telecoms rose on strong sector results, while banks also gained.

BP was up 2.7 percent and Royal Dutch Shell 2.9 percent as U.S. oil prices hit a new record above $92 a barrel, helping UK equities outperform other markets.

The pan-European FTSEurofirst 300 index rose 0.6 percent to close at a provisional 1,576.8, near the day's high of 1,580.3.

It ended with a weekly gain of 0.8 percent in choppy trade and is up more than 6 percent so far this year.

Around Europe, Germany's DAX index was up 0.2 percent, UK's FTSE 100 index was up 1.29 percent and France's CAC 40 was up 0.6 percent.

"We see markets up another 3 to 5 percent before year-end as they play catch up with consensus earnings per share growth of 8 to 9 percent for the year," European equity strategists at Merrill Lynch said in a note.

Banks HSBC and Santander and miners Rio Tinto and Xstrata figured among the day's main European gainers. Telecoms also advanced, with TeliaSonera up 5.6 percent after forecast-beating results.

Fed policy-makers meet next week and financial markets widely expect the Federal Reserve to cut both the discount rate and overnight federal funds rate by at least 25 basis points.