EUROPEAN stocks have risen on the last trading day before the Christmas break, as traders temporarily put aside the debt crisis worries that have roiled markets for most of 2011.
In thin trade yesterday, investors continued to buy up stocks and the single currency after Italy accepted fresh austerity measures and positive US jobs data, traders said.
London's benchmark FTSE 100 climbed 1.02 per cent to close at 5512.70 points.
The index ceased trading earlier than usual ahead of the long festive weekend.
With deals still taking place across continental Europe, Frankfurt's DAX 30 was showing a gain of 0.28 per cent at 5867.87 points in early afternoon deals.
In Paris the CAC 40 was up 1.08 per cent to 3104.95 points as traders brushed off news that the French economy grew less than first thought in the third quarter.
The euro rose to $1.3076 from $1.3050 in New York late on Thursday.
"A combination of Italian Prime Minister Mario Monti's success in gaining approval for his austerity package and continuing economic progress in the US is the catalyst for the markets drive at present," said Spreadex trader Jordan Lambert.
Italy's senators gave their approval on Thursday to austerity tax increases and pension reforms in a bid to avoid bankruptcy for the eurozone's third-biggest economy as a recession looms.
The austerity plan will be Italy's third this year after two earlier packages passed by Monti's predecessor Silvio Berlusconi with total savings of 60 billion euros aimed at balancing the budget by 2013.
Europe's debt crisis has led to the fall of several governments this year, including in Italy, while global markets have also been hammered by concerns over a possible break-up of the eurozone and new painful recession.
The European Central Bank's move this week to provide hundreds of billions of euros in cheap loans to embattled lenders was seen as a double-edged sword - it gave a lifeline but also exposed the region's massive fiscal problems.
"The problem child in the yard is still Europe. This may remain until debt can be reined in and that will not be an overnight fix," said Ben Le Brun, a markets analyst at optionsXpress.
"The backdoor Quantitative Easing from the (European Central Bank) is a definite step in the right direction if - and it's a big if - banks start supporting euro government bonds," he said, referring to the policy of central banks pumping money directly into the financial system to boost the economy.
Asian stock markets closed higher on Friday as investors welcomed the better-than-expected jobs data from the United States that suggested economic recovery was gaining traction in the world's biggest economy.
Seoul climbed 1.07 per cent and Hong Kong rose 1.37 per cent, while Tokyo was shut for a public holiday.
US new claims for jobless benefits last week fell to the lowest level since April 2008, with fewer layoffs in most states.
The figures beat economists' forecasts, with claims 364,000 last week versus the consensus estimate of 380,000, representing a third straight weekly fall.
US stocks scored solid gains on Thursday in the wake of the data, with the Dow Jones Industrial Average closing up 0.51 per cent at 12,169.65 points.
The broader S&P 500 and the Nasdaq Composite each gained 0.83 per cent.
