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European shares close higher on US debt deal progress

European market closes higher

European shares closed higher on Friday amid signs that U.S. lawmakers were moving closer to a deal to re-open the government and avoid a debt default.

European Markets: FTSE, GDAXI, FCHI, IBEX

The FTSEurofirst 300 index provisionally closed higher by 0.4 percent to 1,250.05 points, with investor sentiment boosted by signs that President Barack Obama and Republican leaders were ready to end the political crisis.

With a partial government shutdown in its 11th day, House Republicans were prepared to offer a new deal featuring both an increase in the debt limit and an end to the government shutdown in return for spending cuts, according a report from the AP.

House Speaker John Boehner said Thursday that the Republican Party would offer a temporary increase to the debt ceiling in return for discussions with President Barack Obama on other budget and deficit issues. Obama said he was willing to consider the proposal, but insisted that lawmakers work to end the government shutdown as well.

(Read more: Boehner offers debt ceiling deal)

British equities rose on Friday, with market attention focused on the stock market debut of Royal Mail, up 33 percent from its issue price. After an oversubscribed sale, shares changed hands at 437.6 pence in conditional trading, ahead of their addition to indices on Oct 15.

The provisionally closed up 0.9 percent on Friday

(Read More: Landsdowne grabs huge stake in Royal Mail sell-off)

In other stocks news, shares of Dutch electrical manufacturer closed higher by 2.94 percent after it was upgraded to a "buy" from "neutral" by Goldman Sachs.

French hotel group received a bounce after Citigroup raised the stock to a "buy"; shares closed up 1.89 percent.

Energy supplier E.On closed down 3.58 percent on reports that Gazprom was demanding additional payments from E.On because reserves at a gas field turned out to be higher than initially assumed.

A fake press release that claimed Samsung was acquiring a Swedish tech company was distributed on Friday, causing a brief stir on the Stockholm stock exchange. Shares in Fingerprint Cards rallied 50 percent on the false announcement, briefly adding 1.3 billion Swedish kronor ($203 million) to the company's market capitalization.

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