The FTSE 100 index of leading British shares was up 20.57 points, or 0.5%, at 4,246.67, while Germany's DAX was 17.15 points, or 0.4%, lower at 4,648.12. The CAC-40 in France was 12.75 points, or 0.4%, lower at 3,237.64.
Meanwhile, the Dow Jones industrial average was 15.30 points, or 0.2%, higher at 8,741.91 in thin post-holiday trading, but the broader Standard & Poor's 500 index was 3.22 points, or 0.4%, lower at 884.46.
With Wall Street closing three hours early at 1 p.m EST and many traders taking an extra day off work, volumes have been light.
What U.S. traders were around were focusing on the prospects for the holiday shopping period, which began in earnest earlier. Wall Street expects a weak showing by retailers as consumers, nervous about lost jobs, falling home values and a jittery stock market, grow more restrained in their spending this year.
A rare decline in year-on-year holiday spending would be troubling as it is the most important part of the calendar for most retailers and because consumer purchases account for more than two-thirds of U.S. economic activity. But much of the evidence arriving Friday from retailers is likely to be anecdotal as it will be too early to tally cash register receipts or gain much insight into shoppers' behavior.
Both the U.S. and Europe have enjoyed one of their best weeks in months as some appetite for risk-taking was renewed by the U.S. government's rescue of Citigroup Inc (C, Fortune 500)., economic stimulus plans around the world and further measures from the Federal Reserve to boost bank lending.
Though the downbeat economic environment is expected to play havoc with earnings over the coming months, many investors are slowing returning to buying up beaten-down stocks.
"Valuations are cheap, so cheap as to preclude us from being wholesale sellers at prevailing levels," said Jeremy Batstone-Carr, head of research at Charles Stanley.
"We accept that a sustainable recovery is unlikely until the earnings newsflow improves but much of the bad news is now 'in the price'," he said.
In Asia earlier, the attacks in Mumbai and the shutdown of Bangkok's airports by anti-government protestors did little to dampen improving investor sentiment.
Instead, investors were hopeful that a raft of policy measures around the world, such as Washington's rescue of Citigroup and China's rate cut and multi-billion dollar stimulus plan, would limit the scale of the global downturn next year.
"The market is reacting very calmly to the terrorist attack," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "Investors in Hong Kong are still fixated on China's huge reduction in interest rates. There's bargain-hunting across the board."
India's stock market gained Friday, a day after trading was suspended due to deadly terrorist attacks in the country's financial capital.
The Sensex Index climbed 66 points, or 0.7%, to close at 9,092.72. The benchmark opened down more than 1% and then fluctuated in and out of positive territory before finishing higher.
Trading on the Bombay Stock Exchange was closed Thursday after suspected Muslim militants staged coordinated attacks across Mumbai, India's financial capital, killing at least 143 people. The exchange is located in Mumbai.
Hong Kong's Hang Seng index rose 336.18 points, or 2.5%, to 13,888.24 - a gain of 9.7% for the week. Japan's Nikkei 225 index climbed 1.7% to 8,512.27 - an advance of 7.6% for the week.
Australia's benchmark S&P/ASX200 index surged 4.3%, while South Korea's benchmark rose 1.2%.
Thai stocks also rose amid speculation that the intensifying political unrest could be resolved over the weekend. Protesters wanting to unseat the prime minister have taken over Bangkok's two main airports, disrupting travel and shipments around the region. The main SET index jumped 3.1% to 401.84.
The only major Asian market to decline was mainland China, where the Shanghai Composite index fell 2.4%. But the index rose 8.2% for the month of November, its biggest one-month gain in 15 months, driven by optimism about the government's stimulus package.
Oil prices fell below $54 a barrel as investors eyed a possible production cut by OPEC this weekend amid a gloomy global demand outlook. Light, sweet crude for January delivery was down $0.87 to $53.57 a barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the dollar rose 0.1% to 95.45 yen, while the euro fell 1.2% to $1.2741 after a sharper than anticipated decline in inflation and a rise in joblessness in the 15-nation euro-zone.
Markets are battered again
Dollar mixed against rivals
