European Shares traded higher on Friday and managed their highest close since early November. Investor sentiment was lifted by better-than expected U.S. July existing homes sales. The major gainers were the banking stocks.  

The closing of the FTSEurofirst 300 index of top European shares came at 2.3 percent at 966.87 points. It should be noted that index apart from being up about 16 percent for the year, has hiked almost 50 percent since reaching a lifetime low in early March.  

A notable set of home sales from the U.S., which were much better than the market had been looking for was observed by Jim Wood-Smith, head of research at brokerage Williams de Broe.

Wood-Smith said, "This is a market which is really receptive to the good news and pretty resilient to the not so good stuff. It is a good bull market."  

According to an industry survey, sales of previously owned U.S. homes in July notched their fastest pace in nearly two years. This comes as an indication that housing is pulling out of a three-year slump.

The maximum points to the index were added by the banks, with UBS up 6.4%. The group maintained that it is experiencing a healthy recovery in the Australian wealth management market in 12 to 18 months and foresee consolidation at the higher-end of the business as the market recovers from a period of turbulence.  

A hike by 2 to 5.9% was seen in BNP Paribas, Banco Santander and HSBC.