European shares and the euro rose on Friday as investors focused on bright spots in the global economy and in a mixed set of corporate results, but unease about high oil prices and implementation of Greece's rescue deal tempered risk appetite.

A day after hitting a record high in euro terms, Brent crude jumped above $124, raising worries a run of sharp price gains could stymie the euro zone's growth prospects, making it harder for governments to meet budget targets and pull the currency bloc out of its debt crisis.

Brent has risen more than 11 percent so far this month, on worries over Iranian supply in particular, and reached a high of $124.28 on Friday.

The supportive factors are on the supply side - Iran and Iran and Iran, with a bit of Syria and Sudan, said Christopher Bellew, a broker at Jefferies Bache in London. It would not be at these numbers if it was not for the supply-side problems.

Shares on Wall Street were set to open slightly higher, extending gains after nearing peaks on Thursday not seen since before the 2008 collapse of Lehman Brothers after encouraging jobs data suggested the U.S. economy is gaining momentum.

Data on Friday confirmed Germany's economy shrank by 0.2 percent in the fourth quarter, but investors were optimistic that Europe's biggest economy will avoid falling into recession after a strong business sentiment reading on Thursday.

Markets were also gearing up for a second three-year financing operation by the European Central Bank next week, which is expected to provide nearly half a trillion euros of cheap cash and ease concerns about bank funding.

The euro hit a 10-week high at $1.3412 on trading platform EBS, after rallying 1 percent on Thursday following the German sentiment data.

Gains in energy stocks and strong earnings reports helped the pan-European FTSEurofirst 300 <.FTEU3> index of top shares rise 0.2 percent to 1,077.3 by 11:12 a.m.

Germany's BASF , the world's largest chemical maker by sales, defied analysts' gloom and said business would rise this year, reinforcing hopes that expansion in fast-growing markets like China and Brazil will enable global blue chips to overcome still weak demand in developed markets.

Companies have been cagey about making bold statements for the balance of this year, Europe is in a period of contraction so the outlook is not brilliant, but it is not as bad as some people have feared three months ago, said Ian King, head of international equities at Legal & General.

Italy's top telecoms company Telecom Italia also rose strongly after it said it was slashing its dividend to help cut a huge debt pile.

Global stocks as measured by MSCI were up 0.3 percent after a positive session in Asia.

RALLY RUNNING OUT OF STEAM?

European banking stocks, however, pared early gains and Lloyds , Britain's biggest retail lender, tumbled more than 3 percent at one point after it posted a 3.5 billion pound loss for 2011 and warned of lower revenues this year.

Investors also struggled to put aside concerns about Greece and worries over implementation of the Greek debt deal is dominating the market backdrop.

The euro zone's debt problems are likely to dominate a two-day meeting of G20 finance ministers at the weekend with euro zone countries pushing for their G20 partners to commit more money to the IMF to help the currency bloc overcome its crisis.

Concerns about Greece threatened to spark a further rally in safe-haven German government bonds, which slipped on Friday.

The market is very much biased to the negative given Greece's track record (at implementing reforms)... so any breakdown in talks, for example if Greece doesn't deliver on the conditions laid out in the package (could boost Bunds), said Michael Leister, rate strategist at DZ Bank.

YEN PRESSURED

The dollar punched a fresh 7-1/2-month peak against the yen, which stayed under pressure from the Bank of Japan's easing earlier this month. The dollar has rallied 5 percent against the yen this month helped by Japan's monetary easing and the country's shrinking currency account surplus.

In Australia, an upbeat outlook from Reserve Bank of Australia Governor Glenn Stevens dampened expectations for further interest rate cuts and boosted the Australian dollar, which rose to as high as $1.0756 on Steven's comments. By 11:21 a.m.it was trading at $1.0743.

Gold prices dipped after a four-day run up to a three-month peak on Thursday.

News this week that China's new export orders shrank in February, by the most in eight months, and signs that the euro zone is heading back into recession have taken some of the steam out of copper, this year's best-performing commodity.

Copper, which has rallied 10 percent since the start of the year, was steady in London trade at $8,401. However, it was still set for its best weekly showing in a month.

(Additional reporting by Richard Hubbard, Joanne Frearson, Kirsten Donovan and Alex Lawler; Editing by John Stonestreet)