LONDON - European share indexes rose over 1 per cent on Friday, recouping most of the losses made the previous day after the London bomb blasts, as investors bet the economic climate would not be badly hit by the attacks.
However, sterling failed to follow the London FTSE 100 shareindex's revival, sliding at one time to a new 19-month low against the dollar at $1.7310.
It came off its lows after a softer than expected US jobs report, but the pound continued to be dogged by expectations that the Bank of England would cut interest rates at its next meeting next month to rebuild consumer confidence after holding rates steady at its meeting on Thursday.
In Europe's share markets, the top gainer was Fiat, surging more than 7 per cent on what the market said was an upbeat presentation by chief executive Sergio Marchionne. Danone continued its strength on takeover rumours.
The pan-European FTSEurofirst index closed up 1.34 per cent or 15 points at a session high of 1151.3 points, above last Friday's close of 1149.7 despite Thursday's 1.8 per cent fall when around 129 billion euros was wiped off market valuations.
London's FTSE 100 index raced back past its pre-blast level of 5123 to end a further 1.4 per cent higher at a session peak of 5232 points.
Paris' CAC-40 index rallied 1.9 per cent and Frankfurt's DAX put on 1.5 per cent.
