Europe midday: Shares surge as investors go bargain hunting

The pan-European Stoxx 600 index rose 1.51%, with all major bourses higher. Britain's FTSE 100 was up despite the government losing two by-elections by huge margins, increasing the pressure on Prime Minister Boris Johnson, whose popularity is now ebbing among voters.

“Fluctuating sentiment is again in evidence, with investors reacting with some temporary relief to the absence of any new concerns,” said Interactive Investor head of markets Richard Hunter.

“Indeed, US markets are on course to finish the shortened trading week marginally ahead, although the progress does little to stem the damage already done so far this year.”

It was also a bruising week for commodifies as the oil price fell along with metals as the risk of recession looms.

"Oil prices have undergone quite a significant correction over the last couple of weeks as traders adapt to the increased recession risks, one of the few things that could partially address the imbalance in the market," said Craig Erlam at OANDA.

"Oil prices are paring losses at the end of the week but a little more two-way price action may be on the cards. Risks remain more tilted to the upside as a result of the tightness in the market but if we continue to see recession risks rise around the world, that could change."

In equity news, Zalando plunged more than 11% to a more than three-year low after it lowered its 2022 outlook, citing deteriorating macro conditions and consumer confidence.

Italy's Saipem fell after the energy services group said it would have financial resources available for less than one year if its plans to raise capital did not go through.

Shares in UK bank Barclays made slight gains after the company said it had struck a deal to acquire specialist lender Kensington Mortgage Company.

Shares in Russian gold miner Polymetal continued to make gains, a day after maintaining output guidance and appointing a new auditor.