European stocks rose in early trade on Friday, extending the week's thin-volume, pre-holiday rally after reassuring U.S. economic data in the previous session gave a short-term fillip to a market still overshadowed by the euro zone debt crisis.

At 0807 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.7 percent at 989.19 points.

The macro data from the U.S. is helping us forget about the debt crisis, but that shouldn't last very long, and there's still a big risk of getting a few credit downgrades in Europe before the end of the year, a Paris-based trader said.

Banks gained ground, extending their timid Christmas rally after a dismal year, with Deutsche Bank up 1.7 percent and BNP Paribas up 1.4 percent.

(Reporting by Blaise Robinson)