Europe bounces back after a rocky week; Rolls Royce sinks

Europe shares saw strong gains on Friday, ending the day firmly in positive territory, as investors searched for bargains after heavy selling, and reassuring words from members of the U.S. Federal Reserve helped to boost sentiment.

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
---
DAX
---
CAC
---
IBEX 35
---

Autos bounce back; Rolls Royce falls

The pan-European FTSEurofirst 300 Index closed higher by around 2.8 percent, with all major bourses bouncing back after a tough week of selling.

The German Dax and the French CAC 40 ended up around 3 percent, with London's FTSE 100 posting gains of 1.8 percent. Greek stocks also enjoyed a strong rally with a rise of over 7.2 percent.

Auto stocks and banks were the standout gainers after the heavy selling on Thursday, and energy stocks received a lift with oil prices reversing some of this week's losses.

Tony Cross, a market analyst at Trustnet Direct, said that traders were attempting to hunt out some bargains after the the "shake-out" seen mid-week.

Kathleen Brooks, a research director at FOREX.com, said that market sentiment was back at the end of the week.

Read MoreRally! Markets surge after 6-day losing streak

"Stocks in Europe are higher, oil prices are rising and even Greek bond yields are falling. Central bankers from the U.S. and U.K. have saved the day," she said in an afternoon note.

Meanwhile, at the bottom of benchmarks, Rolls Royce was the major mover, slipping to close down around 11.5 percent, after the U.K.-listed aircraft engine maker announced that it wouldn't return to profit growth until 2015.

Read MoreRolls-Royce: Russia sanctions to hit 2015 profit

US stocks surge

In the U.S., stocks surged at the start on Friday as investors bet on further stimulus from central banks and corporations including General Electric and Morgan Stanley reported profits that topped expectations.

Morgan Stanley gained after the investment bank tallied third-quarter earnings that beat estimates. General Electric climbed after its quarterly profit exceeded expectations.

St. Louis Fed President James Bullard was credited with the bounce back in markets. He said on Thursday that the U.S. Federal Reserve should consider continuing to buy bonds beyond the scheduled end of quantitative easing later this month, due to market turmoil.

Also, the Commerce Department on Friday reported new-home construction climbed 6.3 percent in August, signaling improvement in the U.S. residential real-estate market.

Read More'Stunning' Fed move put bottom under S&P: Traders

In the U.K., the Bank of England's Chief Economist, Andrew Haldane, said the central bank may need to keep interest rates lower for longer to reduce the chances of an economic stagnation.

Read MoreBoE's chief economist: Rates may stay low for longer

Jimmy Choo floats

Finnish telecoms company Elisa Communications rose to the top of benchmarks, climbing 4.8 percent, after announcing its third-quarter results. The company lifted its full-year profit outlook on Friday morning.

In corporate releases. Teliasonera traded 2.2 percent higher after the mobile network operator reported third-quarter earnings.

Shares of the shoemaker Jimmy Choo started trading in London on Friday. Its stock rose 2.8 percent to trade at 144 pence per share.

Read MoreJimmy Choo IPO gets off the ground at 140p/share

Follow us on Twitter: @CNBCWorld