European shares rebounded slightly on Friday, regaining some ground after losses suffered this week on growth and inflation worries, as oil slipped to a five month low.

By 1000 GMT, the FTSEurofirst 300 <.FTEU3> index of leading European shares rose 0.4 percent to 1,356.5 points, having lost around 2 percent this week on uncertainty over Federal Reserve interest rate policy and global growth worries.

On a light diary day for corporate and economic news, a fall in the oil price to $67 a barrel, near its five-month low, buoyed the market.

BP was a standout gainer, adding 1.3 percent after it said it could restart its giant oil field in Alaska by the end of October after rusty pipelines forced part of the field shut last month.

Also on the upside, the DJ Stoxx telecoms index <.SXKP> rose 0.7 percent on newspaper reports that Deutsche Telekom planned to save some five billion euros by 2010.

This show that there is scope to cut costs in the sector, said Frank Rothauge, a telecoms analyst at Sal. Oppenheim.

The sector got also a lift from a report in Italy's Il Sole/24 Ore that Telecom Italia was considering selling its mobile phone unit to private equity companies.

Telecom Italia gained as much as 1.3 percent, while Vodafone rose 1.3 percent and Deutsche Telekom ticked up 0.7 percent. The DJ Stoxx telecoms index has fallen 6 percent since May.


On the downside, German retail giant Metro fell 3 percent after JP Morgan said the shareholder pool that controls the majority of shares has reduced its stake by a tenth. Dealers said the bank was placing 17.5 million shares at about 43 euros per share.

Italy's number four bank Capitalia, added 0.8 percent after it said it was revising upwards some of its 2007 targets as first half results showed it had hit some goals ahead of time.

Elsewhere, Altana fell 1.2 percent on speculation it might prove difficult for the firm to sell its pharmaceutical unit at a good price.

It looks like Altana will face difficulties to fetch what they had originally in mind, said a trader.

A source close to the bidding process said the deadline for submission of bids expires on Friday. (additional reporting by Mark Meadows in London)