European shares hit a three-week closing high on Friday and posted their biggest weekly gain in about 8 weeks as investors grabbed equities after figures showed that U.S. employment declined far less than expected in August.
But caution prevailed as an industry report said the U.S. non-manufacturing sector grew in August for an eighth straight month, but at a slower pace than July and at a rate that was below expectations.
The FTSEurofirst 300 <.FTEU3> index of top European shares provisionally ended 0.8 percent firmer at 1,063.00 points -- the highest close since early August -- after rising to a high of 1,070.33 earlier in the session. The index climbed 3.6 percent during the week, its best weekly performance since early July.
I would not expect, on the basis of the numbers that we have seen today, risk appetite to come back strongly, but the immediate concerns that the U.S. economy could drop back in recession were eased a bit on balance, said Klaus Wiener, head of research at Generali Investments.
Financial shares, which derive strength from robust economic environment, featured among the tope gainers, with the STOXX Europe 600 banking index <.SX7P> rising 1.5 percent. Barclays
(Reporting by Atul Prakash)