European shares were little changed on Friday in choppy trade, underpinned by a crisis budget in Spain that raised expectations the country will apply for a sovereign bailout.
The FTSEurofirst 300 was up 0.1 percent at 1,103.87 by 0850 GMT, building on a 0.4 percent rise from the previous session, while the Euro STOXX 50 climbed 0.3 percent. Spain's IBEX rose 0.2 percent.
Traders were reluctant to place too much emphasis on the day's market action, saying there was a typical end-of-quarter feel about it as fund managers repositioned portfolios at the end of a strong quarter for equities.
But with Spain remaining firmly in the spotlight, sentiment looked vulnerable to the results of a stress test of the country's banks and a credit rating review by Moody's both due later in the day.
Technical analysis was bullish for the Euro STOXX 50, which has jumped around 11 percent this quarter fuelled by bond-buying efforts by major central banks to bolster a fragile global economy.
"We are still looking at something which is relatively positive," Phil Roberts, chief European technical strategist at Barclays Capital, said.
"The uptrend off the June low still appears to be in play and while we remain above the range highs of the beginning of September/end of August - 2,467/2,461 - it still looks like it's stepping higher in an orderly trend," he said, targeting this year's peak, 2,611.
Mining stocks were in demand, resuming their rally from the previous session underpinned by expectations for fresh stimulus measures from China, the world's top metals consumer.
Events in Spain remained a focus for investors in Europe.
Late on Thursday, Madrid unveiled a 2013 budget it said would focus on spending cuts rather than tax rises.
On Friday, Spanish banks were set to learn from an audit an updated estimate of the damage caused by the collapse of a real estate boom.
"It's quite clear that (Spain) is going to have to ask for a bailout. Will that impact upon the market? It should already be factored in. We'll wait and see what the stress tests say before we make any pronouncements on where the banking sector is headed," Peter Dixon, economist at Commerzbank, said.
"Whilst the economic outlook probably mitigates against a sharp rally in equities, I think floor has been placed under the markets (by central bank action) and I remain cautiously optimistic."