European shares rose by midday Friday, on course for their first daily gain in three sessions as energy and mining stocks gained and fuelled a modest bounce after Thursday's near 6 percent drop.
Caution ahead of an expected drop in U.S. employment figures for October supported perceived defensive safe-havens such as pharmaceuticals and food producers, while the banks remained under pressure.
By 1135 GMT the FTSEurofirst 300 index of leading European shares was up 1.1 percent at 908.19 points, after losing 5.8 percent on Thursday, as rate cuts by the European Central Bank and the Bank of England failed to soothe economic concerns.
"I don't think this (rally) is sustainable," said Ryan Kneale, markest analysts at BetsforTraders.com.
"We've got non-farm payrolls today and probably people will be pondering that for a day or two afterwards if it's anything significant," he said, adding: "What is more important, and more so than usual, is politics. We are in a politically-driven market right now."
A softening in the U.S. dollar against a basket of major currencies lifted crude oil by over 3 percent, while major base and precious metal prices bounced.
BP and Total were among the top-weighted gainers on the broader market, rising between 3.1 and 4.8 percent, along with Rio Tinto and BHP Billiton, which gained between 2.8 and 3.8 percent.
Miners Kazakhmys and Anglo American rose between 1.8 and 4.1 percent.
The DJ Stoxx basic resources index fell by nearly 14 percent on Thursday, pounded by falling commodity prices as investors fretted that looser monetary policy and gradually thawing money markets would not be enough to ward off global recession.
Key interbank euro lending rates extended a near month-long decline on Friday, a day after the ECB cut rates to 3.25 percent.
NO REAL RESPITE
In spite of Friday's rally, the FTSEurofirst 300 is still on course for a 2.2 percent fall this week, which would make this the third week of declines in the last five weeks.
"This is simply a technical rebound, nothing else, because valuation-wise, earnings and everything is still fairly bleak," said Franz Wenzel, strategist at AXA Investment Managers in Paris.
"There is no fundamental reason other than maybe people starting thinking about monetary policy in a more positive sense and commodity prices are giving some support."
Positive news also came from Germany, where data showed the first monthly increase in exports in three months.
Defensive pharmaceuticals rallied, with Novartis up 3.8 percent, Roche up 3 percent and AstraZeneca and GlaxoSmithKline both up 0.4 percent.
Food producers were also among major gainers, as Nestle and Danone gained over 3 percent.
U.S. stock futures were up between 1 and 2.4 percent, suggesting a recovery on Wall Street after Thursday's decline, in which stocks staged their worst two-day decline since October 1987.
The latest U.S. nonfarm payrolls report, due at 1330 GMT, is widely expected to show the world's largest economy continued to shed jobs in October, for the 10th month in a row.
A median forecast of economists polled by Reuters is for a drop of 200,000 in the number of workers on non-farm payrolls, the largest monthly fall since March 2003.
Financials tempered gains on the broader European market. HSBC fell 0.8 percent, but was still among the worst drags on the FTSEurofirst 300, while BNP Paribas and UBS each fell 1.8 percent and UniCredit lost 3.2 percent.
Reinsurer Munich Re flouted the trend to rise 5.2 percent after third-quarter figures that analysts said were not as bad as they first appeared.
Around Europe, the FTSE 100 index rose 1.8 percent, while Germany's DAX gained 1 percent and France's CAC 40 rose 0.9 percent.
