The pan-European STOXX 600 ended up 0.4 percent, scoring its strongest weekly gains in seven weeks.

Analysts and traders saw new trade talks as a positive for the market, with some expecting US President Donald Trump to seek to seal a trade deal before mid-term elections in November, but they pointed to lingering nerves in the market.

However, after European markets closed, shares in the United States turned lower after a Bloomberg report said Trump had asked aides to proceed with tariffs on $200 billion more in Chinese imports.

Topping the STOXX was bank and asset manager Investec which jumped 8.4 percent after saying it would demerge and separately list its asset management arm.

Casino, whose stock price has been hit by concerns over its debts and that of parent Rallye, bounced 6.8 percent after a reassuring note from brokerage firm Kepler-Cheuvreux.

Autos rose 1.4 percent, leading sectoral gainers and building on the previous session's rise.

Miners rose 1 percent and tech gained 0.7 percent.

Among tech stocks, STMicro rose 1.9 percent after Bank of America Merrill Lynch upgraded the stock to "neutral".

"We think the shares are pricing in a significant amount of negative sentiment with regards to near term demand," the US bank wrote. It also affirmed its buy rating on both Infineon and ASML.

UK housebuilders Taylor Wimpey and Barratt Development fell sharply after Bank of England governor Mark Carney was reported in the Times as having told ministers that a no-deal Brexit could cause house prices to fall by 35 percent over three years.

Their stocks recovered ground to end slightly up after Carney clarified that the bank's "stress test" scenarios in which house prices fell sharply did not amount to a prediction from the BoE.

Elsewhere, Danske Bank fell 1 percent after the Wall Street Journal reported that US law enforcement agencies are investigating the bank over allegations of money laundering through Estonia. The bank declined to comment.

Investors have been shunning European stocks in favour of US stocks this year, lured by significantly stronger earnings growth there.

Overall the market is currently short European equities, according to Bank of America Merrill Lynch.

Some $57 billion has flowed out of European equity funds over the past six months, strategists at the US bank said, citing EPFR data.