European shares pounce after selloff, German IFO sentiment improves strongly

European shares kick started Friday’s trading session higher, bouncing off its biggest one-day fall in nearly a month, buoyed by German IFO confidence data while talks that central bank liquidity will soon resume fueled sentiment.

- Benchmark STOXX Europe 600 rose 0.08% to 304.23

- STOXX 50 gained 0.38% to 2,787.35

Shares in Europe were higher on Friday, buoyed by comments from ECB’s chief Mario Draghi, who said the euro zone economy was improving, while he added that the Eurozone and the single currency was more stable than a year ago.

However, Draghi said that the economic conditions in the region remained challenging and governments must push on with reforms and banking union plans.

- British FTSE 100 went up 0.02% to 6 ,69 7.98

- France`s CAC 40 rose 0.71% to 3,995.47

- German DAX gained 0.37% to 8,382.58

A report released earlier showed GDP for Germany, Europe`s largest economy unrevised in the first quarter of 2013 at 0.1 percent. Meanwhile, another report sentiment among businesses in Germany improved in May adding to signs the region is gaining momentum.

IFO Business Climate gauge rose to 105.7 from 10.4 a month earlier, IFO Current Assessment also jumped to 110.0 from a revised 107.3 in April.

The EURUSD pair rose to trade at $1.2978, from an opening at $1.2931, after hitting a high of $1.2986, and a low of $1.2903.

European stocks sank on Thursday weighed down by weaker than expected manufacturing data from China and concerns the U.S. Federal Reserve could soon pull back its stimulus measures.  However worries eased after St. Louis Fed President James Bullard said on Thursday that he did not think the Fed was "that close" to taking any such decision.

Wall Street closed on Thursday with heavy losses as fears over a sooner than expected tapering to the Federal Reserve’s bond-buying program and weak Chinese economic data overcame strong data on jobs market.

Traders are expected to keep an eye on the Commerce Department`s report on durable goods orders for April. On the same vein, The U.S. markets will be closed on Monday for Memorial Day.