European Shares Rally While Middle East Tensions Loom

European shares closed higher on Friday following robust U.S. job data, easing growth fears. However, weekly losses were recorded due to escalating Middle East conflicts restraining risk-taking. The STOXX 600 gained 0.4%, led by banks and autos, while energy stocks performed best all week amid high oil prices.

European shares experienced an uptick on Friday as reassuring U.S. jobs data calmed growth concerns in the world's largest economy. Nevertheless, shares fell over the week as rising tensions in the Middle East kept risk-taking limited.

The STOXX 600 index increased by 0.4%, with gains noted across major local markets such as Germany and France. September's U.S. job growth hit a six-month high, with the unemployment rate dropping to 4.1%, signaling economic resilience that might deter the Federal Reserve from making significant interest rate cuts this year.

Economically-sensitive banking stocks led the gains among the STOXX sectors, climbing 1.8%. Autos rose 1.6% following the EU's decision to impose considerable tariffs on China-made electric vehicles, going against Germany's position. Despite these gains, most European markets recorded weekly losses as investors avoided riskier assets like equities amid Middle East tensions.

(With inputs from agencies.)