European shares hit one-month high

European shares hit a one-month high on Friday to record their best week in 10 months after US manufacturing sector growth showed a pick-up in June, raising hopes that the recovery in the world's largest economy remained on track. The macroeconomic numbers and continued positive sentiment after the successful passing of key austerity votes in Greece earlier in the week helped banks feature among the top gainers, with the sector index rising 2.8 percent.
The Thomson Reuters Peripheral Eurozone Banks index gained 3.5 percent, Greek banks jumped 5.3 percent, and Greek shares rose 2.3 percent. The FTSEurofirst 300 index of top European shares ended 0.8 percent firmer at 1,119.36 points, the highest close in one month. After falling for eight straight weeks, the index rose 3.6 percent this week, its best performance in 10 months. Growth in US manufacturing posted a surprise gain in June, according to the Institute for Supply Management, contrasting with Europe and Asia where manufacturing activity lost steam for a second month as interest rate rises there began to bite.
"The ISM data comes at a time when markets feel some relief after the passage of two successful votes in Greece. It fits well into the current mood of relief," said Tammo Greetfeld, equity strategist at UniCredit in Munich. "However, it remains to be seen whether a soft patch in the US economy is really over." An 8.5-percent fall to two-month lows in the Euro STOXX 50 volatility index , one of Europe's main barometers of market sentiment, suggested a rise in demand for riskier assets.