European shares rose by midday on Friday with gains in banking and mining stocks overshadowing weakness in drugmakers and falls in British Airways after the company made a record loss.
By 1039 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.2 percent at 859.61 points in a choppy session having been up as low as 851.37 points earlier.
"I think we still need a genuine pullback of around 5-10 percent … but the market is extremely reluctant to do it," said David Buik, partner at BGC Parnters.
"There is a lot of money out there and I think a lot of people think they might miss out… I think people certainly feel that the worst is over and that even if we get a pullback there is plenty of fuel in the tank for a decent recovery to be staged in time," he said.
Miners were higher as copper rose 2.2 percent. Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto, Vedanta Resources and Xstrata
A bullish note from Goldman Sachs which upgraded Anglo American and Vedanta Resources to "buy" from "neutral" also helped lift investor sentiment in the sector.
Banks were among the top movers on the index. Banco Santander, BNP Paribas, Lloyds Banking Group and UniCredit were up 1.4-4.4 percent.
The DJ Stoxx banking index is still up around 21 percent for year, compared to an about 64 percent drop in 2008.
Insurers also ticked up with Aviva, Aegon and ING 2.7-3.7 percent higher.
BRITISH AIRWAYS FALLS ON RECORD LOSS
British Airways fell 5 percent after it slumped to a record loss, cancelled its dividend and nearly doubled its debt pile, adding that the tough conditions made it impossible to give any guidance for the current period. "Today's numbers really are a comprehensive tale of woe, with almost every metric eligible for intensive care as BA heads deep into the perfect storm," said Richard Curr, head of dealing at CFD specialists Blue Index.
Drugmakers were in the doldrums as GlaxoSmithKline slipped 1.1 percent. The company is battling the U.S. Internal Revenue Service over a potential $1.9 billion in back taxes, interest and penalties. AstraZeneca, Novartis, Novo Nordisk and Shire were down 0.7 to 1.6 percent.
But macro data underscored investor worries about difficult conditions for consumers and companies.
Britain's economy shrank by 1.9 percent in the first quarter, its biggest quarterly decline since 1979, official data confirmed, with household spending falling at its fastest rate since 1980.
On Thursday, Standard & Poor lowered its outlook on the UK to "negative", saying it might cut the country's precious triple-A Credit rating, while data from the United States on jobless claims and business conditions in the previous session dented hopes of a quick economic rebound.
Across Europe, the FTSE 100 index was up 0.7 percent, Germany's DAX was 1 percent higher and France's CAC 40 was up 0.9 percent.
