European equities closed higher on Friday, as confidence about the state of the global economy heightened following positive U.S. data, allowing shares to consolidate near multi-year highs.
The pan-European provisionally closed higher by 0.1 percent to 1,296.66 point. Investors in Europe were buoyed by the closing above 16,000 for the first time ever on Thursday, as well as the number of Americans filing for jobless benefits declining to a near two-month low.
U.S. stocks built on gains on Friday, with the Dow extending gains, as positive economic reports countered worries about the Federal Reserve curbing stimulus as early as December.
"Jobless claims were better on the margins, inflation picked up a little, but no significant change there, and earnings and companies continue to do fairly well. And the market was drifting down, so it puts you in a position where it doesn't take much good news to resume the rally," said Doug Foreman, co-chief investment officer at Kayne Anderson Rudnick.
Michael Hewson from CMC Markets said that investors appear to have realized that they may have over reacted somewhat with regard to the prospect of the Fed reducing its stimulus in December.
"The better than expected weekly jobless claims, under any other circumstances, would certainly have helped reinforce the view that a taper is coming, but given a few hours to digest the contents of the minutes and what they actually said, while a taper may be closer than it was at the beginning of the week the smart money still remains on some form of action in the New Year and not December," Hewson said.
However, London's closed down around 0.1 percent as mining companies took the most off the index on concern about their earnings. The index came under pressure as the UK mining sub-index fell 1.9 percent, making it the sector losing the most. closed down 0.32 percent, down 1.75 percent and down 1.6 percent.
European Central Bank President Mario Draghi played down a report earlier this week that the ECB could introduce negative deposit rates.
"Don't try to infer from what I say anything on the possibility of negative rates on the deposit facility," Draghi said at an event organized by German newspaper Sueddeutsche Zeitung. "As I said at the press conference, this was discussed at the last monetary policy meeting and there is no news since then."
Draghi also addressed a banking congress in Berlin on Friday speaking in detail about upcoming stress tests for euro zone banks.
Growth data for Germany released on Friday showed the economy had grown by 0.3 percent since the last quarter, marking a 1.1 percent increase year-on-year. In addition, the business climate index from German think-tank Ifo – which measures business confidence among 7,000 domestic firms – climbed to 109.3 in November, surpassing forecasts and October's 107.4 reading.
(Read More: 'Europe heading forcatastrophe' despite Germany)
In stocks news, shares of hospitality company Whitbread closed higher by around 2.98 percent after JPMorgan raised its outlook on the firm to an "overweight" from "neutral".
, a British government services company saw its shares close roughly higher 0.29 percent after an upgrade to "outperform" by Credit Suisse.
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