European shares extended gains to hit a session high on Friday, as U.S. futures indicated Wall Street may not drop as much as previously expected.

At 1325 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.5 percent at 992.91 points, and had reached a high of 994.31 for the day. Banks added most points to the index. BNP Paribas (BNPP.PA), Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE) and UBS (UBSN.VX) were up between 2.2 and 3.3 percent.

The pan-European index fell 3.3 percent on Thursday, its biggest one-day percentage drop in seven months on worries about the effects of Dubai's debt crisis.

Futures for the Dow Jones DJc1, S&P 500 SPc1 and Nasdaq NDc1 were down between 1.8 and 2.3 percent, paring earlier losses. Markets worldwide are digesting the implications of the debt crisis in Dubai.

U.S. markets, which closed for the Thanksgiving Day holiday on Thursday, will close early, at 1800 GMT, on Friday.