European shares rose by midday on Friday as firmer metals prices on the back of reassuring output numbers from Japan boosted miners, while investors awaited more economic data from the U.S. later in the day.
At 1034 GMT, the FTSEurofirst 300 index of top European shares was up 1.1 percent at 869.36 points. It closed 1.2 percent lower on Thursday.
The European benchmark index lost 45 percent in 2008 and fell further early this year, hitting a record low on March 9, but has recovered 35 percent since then.
"Commodities are currently playing the recovery scenario," said Carsten Klude, strategist at M.M. Warburg.
"We're seeing a mixture of partly positive data from Japan, strong gains on Wall Street and Asia overnight and expectations that the global economy might be back on track earlier than feared," he added.
Data showed that Japanese factory output rose 5.2 percent in April, the biggest monthly gain since 1953, topping forecasts for a 3.2 percent gain.
Manufacturers surveyed by Japan's Ministry of Economy, Trade and Industry expected their output to jump 8.8 percent in May and a further 2.7 percent in June.
The data fuelled a rally in copper prices, which rose to a three-week high. Gold prices hit a three-month high.
Mining shares gained as a result, with the DJ STOXX Basic Resources Index as the top sectoral leader, up 3.5 percent.
BHP Billiton was up 3.8 percent, Xstrata added 5.9 percent, and Anglo American 4.1 percent.
"The better Japanese numbers confirm that survey improvements … are translating into hard data," Goldman Sachs said in a research note.
US DATA EYED, OILS GAIN
Investors were also looking ahead for U.S. Q1 GDP data, due at 1230 GMT, Chicago PMI at 1345 GMT and the University of Michigan sentiment indicator at 1355 GMT.
Oil and gas stocks were among top gainers as the price of crude oil rose above $66 a barrel to be on track for its largest monthly percentage gain in more than a decade.
Total rose 2.1 percent, ENI advanced 0.4 percent and BP put on 0.4 percent.
Banks gained, too, reversing Thursday's losses, with UBS adding 2.2 percent, BNP Paribas up 1.8 percent, Societe Generale rising 3.2 percent and Barclays 1.5 percent.
Insurers were also in the black on the DJ Stoxx index after a series of sector rating and price target upgrades by Goldman Sachs.
However, data from the European Central Bank showed loans to euro zone businesses and households grew at the slowest pace on record in April, "reflecting the recession in the euro area" as Commerzbank wrote in a note.
Shares in pharmaceuticals maker Bayer rose 3.3 percent after news that U.S. regulators have asked for more information before possible approval for anticoagulant Xarelto.
Morgan Stanley said approval for Xarelto in the United States was expected in the second half of 2009 and that the drug has 2 billion to 3 billion euros annual revenue potential, which could be worth 7 euros per share.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 were up between 1.1 and 1.2 percent.
