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Europe closes mixed; Italian banks, health care weigh

European shares closed mixed on Friday, with Italian banking stocks and the health care sector weighing on wider benchmarks.

Italian banks weigh

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The pan-European FTSEurofirst 300 closed 0.4 percent higher, with Italian banks showing heavy declines after some ratings actions by Standard & Poor's. The ratings agency downgraded Italian banks, leaving BMPS trading lower by 3.85 percent, Unicredit down over 2 percent and Mediobanca down as much as 2.2 percent. Other banks from the European periphery - like Bankia and Bank of Ireland - also saw heavy losses.

London's FTSE 100 led gains in Europe, unofficially ending around 1.4 percent higher. The French CAC closed 0.3 percent lower and Germany's DAX finished down 0.5 percent.

On the week, the FTSE is leading major European bourses, adding around 4 percent, followed by the CAC with 3.1 percent and the DAX with gains of 1.8 percent.

Meanwhile, shares of the heavily weighted Roche slipped over 6 percent after being hit by the failure of a cancer drug that it was trailing.

Gains were also tempered by a report from Reuters that the European Central Bank may require certain peripheral countries such as Greece or Portugal to set aside extra money or provisions to cover potential losses from any quantitative easing it undertakes on next year.

German data beats

At the session open on Friday, sentiment saw a rebound with investors still cheering dovish words from Janet Yellen, the chair of the U.S. Federal Reserve, and her pledge that the Fed would be patient in increasing interest rates in the U.S.

U.S. stocks rose on Friday, with the Dow industrial average and S&P 500 on track for their second best week in nearly two years.

In currency markets, the euro hit a 28-month low against the dollar $1.2240 on diverging central bank policies.

BlackBerry fell after the wireless-device maker fell posted a larger-than-expected decline in quarterly revenue; CarMax gained after the used-car seller reported a 16 percent gain in quarter revenue.#

In Asia on Friday, the Bank of Japan kept its monetary policy steady at its final meeting of the year, as had been expected. But the central bank raised its economic assessment, citing signs of a pickup in exports.

On the data front, German research group GfK said its consumer climate indicator, based on a survey of around 2,000 Germans, forecast a rise to 9.0 in January, from 8.7 in December.

IAG climbs

In stocks news, shares of French multinational Atos rose 4.7 percent after announcing that it will buy Xerox's outsourcing unit.

Orange shares received a bounce, rising 1 percent, after Deutsche Bank raised its outlook on the firm to a "buy" from a "hold."

Meanwhile, shares of British Airways owner IAG climbed 1.5 percent after news that a takeover bid for Aer Lingus had been rejected.

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