European shares rose on Friday, fed by a rally in energy stocks as crude oil prices hit fresh highs, although banks fell and U.S. consumer sentiment data knocked the market back from session peaks.
Crude oil futures hitting a high just shy of $128 a barrel drove up the oil and gas sector in Europe, pushing up shares in Total, BP and Royal Dutch Shell by 1.4 to 2.3 percent.
The FTSEurofirst 300 index of top European shares rose 0.2 percent to close at an unofficial 1,362.76 points, having fallen back from the session high of 1,375.62 after U.S. consumer confidence data hit its worst level in nearly 28 years.
But the index has still gained 1.5 percent this week, helped in large part by fairly robust corporate earnings as well as U.S. data that showed tamer inflation and consumer spending holding up.
"In general terms, the data specifically coming out of the United States has certainly been supportive, despite the fact that we had disappointing consumer confidence numbers today,'' said Barclays Stockbrokers strategist Henk Potts.
Among banks, Royal Bank of Scotland lost 3.5 percent, UBS fell 1.7 percent, Barclays shed 2.1 percent and BNP Paribas lost 0.7 percent.
'Not as Bad as People Thought It Would Be'
"It looks as if a recovery is setting in—emerging markets are strong, Europe is strong and after the huge amount of worry and panic, it's not as bad as people thought it would be," said Mark Bon, a fund manager at Canada Life. "The flight to defensives and large caps and the sell-off in emerging markets might all be overdone."
Technology stocks were stronger, tracking their U.S. peers, which rose on a battle to control Yahoo.
The FTSEurofirst has lost 8.9 percent so far this year, punctured by banks' multibillion dollar writedowns as a result of the credit market crisis, but analysts say a turning point could be at hand.
"We're unlikely to get to last year's highs, but we should make some money this year," said Canada Life's Bon.