European shares closed fractionally higher on Friday after staging a late bounce when European Central Bank sources told Reuters the ECB is considering setting yield band targets.

The move is part of a new bond-buying programme aimed at keeping the ECB's strategy shielded and avoid speculators trying to cash in, the sources said.

The FTSEurofirst 300 index provisionally closed up 0.1 percent at 1,090.68 points, but was down 1.8 percent on the week.

“Markets are fairly priced so I think the recent drift down is healthy given that we had such a quick run,” Colin Lunnon, a fund manager at Octopus, said.

“A lot of it was done on talk (of central bank intervention), now we need to see a bit of walk. If we don't get that we think the market could drift a bit further.” - Reuters