The pan-European Dow Jones Stoxx 600 index (ST:SXXP 230.05, +0.40, +0.17%) rose 0.2% to 230.05, extending the 1.4% gain on Thursday.
The gains came as surveys continued to point to a recovery for the economy. The Markit/CDAF French flash manufacturing purchasing managers index rose to 50.2 in August from 48.1 in July, a 15-month high and above the 50 no-change threshold, while in Germany, manufacturing activity fell at its slowest pace in 12 months in August.
On a regional level, the U.K. FTSE 100 index (UK:UKX 4,766, +9.08, +0.19%) advanced 0.3% to 4,770.61, the German DAX (DX:DAX 5,318, +5.53, +0.10%) index climbed 0.2% to 5,320.91 and the French CAC-40 index (FR:PX1 3,511, +5.43, +0.16%) rose 0.2% to 3,512.29,
Asia markets were mostly lower on Friday, while U.S. stock futures were pointing to modest gains on Wall Street, with Dow Jones Industrial Average futures up 3 points. Read more on Asia Markets.
Of movers in Europe, UBS (CH:UBSN 17.50, +0.76, +4.54%) (UBS 16.93, +1.49, +9.65%) shares rose 5%. This week, the Swiss lender reached a settlement with U.S. tax authorities but didn't have to pay a fine. Also, the Swiss government offloaded roughly 332 million shares in the lender, making a net profit of around $1.1 billion in the process.
Recruitment firm USG People (NL:USG 10.73, +0.77, +7.70%) rose 8.2% and chemicals firm Rhodia (FR:RHA 8.20, +0.42, +5.42%) added 5%.
There were some patches of weakness in Europe, with Lonza Group (CH:LONN 109.70, +0.10, +0.09%) down 5.3% after it said its made a non-binding $3.55 per restricted voting share offer for Patheon (CA:PTI 2.58, -0.07, -2.64%) , a Canadian-listed pharmaceutical services firm.
Deutsche Bank analysts said the offer equates to an enterprise value of $700 million, or 8.4 times Patheon's 2008 earnings.
"While we expect the deal to be mildly EPS accretive in year two, we struggle with the value creation - this asset may not reach cost of capital before year five without a meaningful step-up in profitability," they said.
Lonza was also cut to sell from neutral by UBS on Friday, with the broker citing a more challenging biopharma contract manufacturing market and the impact of the Teva biosimilars joint venture.
