European stocks rebounded Friday as investors shook off the pessimism of recent days, with price action supported by both M&A as well as corporate earnings news.

The FTSE 100 closed 0.46% higher, at 7,470 in London, while the DAX index added 0.39% to close at 12,638 in Frankfurt. Over in Paris, the CAC 40 notched up a 0.70% return before settling at 5,324 for the week.

Benchmarks in southern Europe were also buoyant, with the FTSE MIB in Milan and the IBEX in Madrid both having gained more than 1% by the close.

Shire (SHP) stock led the pharmaceuticals sector higher during morning trading in London Friday, with a gain of 1.2%, changing hands at an intraday high to 4,902.0 pence before paring gains.

However, Hikma (HKMPY)  was the top performer in the pharma sector at the close, up 2.5% for the session.

The generic drug maker had been forced to watch its stock get pummeled again during the early hours of trading after management slashed guidance for full-year earnings, although the shares clearly staged a strong recovery in noon trading.

In Frankfurt, RWE (RWEOY) was the top gainer after reports emerged that the utility firm is in talks with France's Engie (ENGIY) to create a Franco-German energy giant. The stock was up more than 5% at the close.

BMW (BMWYY) stock also gained Friday after the German automaker said it would increase its production capacity in China, the world's largest car market, just six months after losing its crown as the world's largest luxury car firm to Mercedes-Benz maker Daimler (DDAIF) .

It celebrated the opening of a new section of one of its automotive plants in Dadong, Shenyang, after having invested more than €1 billion ($1.1 billion) to expand its production capability.

The Wolfsburg based firm will now be able to produce as many as 450,000 vehicles from its two facilities in the Shenyang region, an increase from the 400,000 ceiling it previously faced. The plants in question produced around 360,000 vehicles in 2016.

Dufry (DUFRY) was another big gainer on the European continent after a filing with the Swiss regulator showed the world's second-largest luxury goods firm, Richemont (CFRUY) , jetting into the No. 4 spot on the duty-free retailer's shareholder register.

Richemont, the owner of the Cartier watch brand and the most significant rival to LVMH (LVMUY) , declared a 5% stake in the company.

The declaration comes less than a month after China's HNA bought a 16.8% slice of the retailer, for an undisclosed sum, from existing shareholders.