European shares rebound led by commodities stocks

London - European shares rebounded on Friday after approaching 2015 lows in the previous session, with firmer auto and commodities stocks leading the way, yet they remained set to record a loss for the week.

The region's stock markets have been hit this week by an emissions test scandal at Volkswagen and new signs of a slowdown in China, while the prospect of an imminent US interest rate rise has also weighed on equities.

The pan-European FTSEurofirst 300 index, which ended down 2.1% on Thursday, was up 3.35%, while the eurozone's blue-chip Euro STOXX 50 index climbed 3.6%. However the FTSEurofirst remained down by more than 1% from the end of last week.

Germany's DAX, which has suffered this week due to the problems at Volkswagen, rose 3.25 but remains some 20% below a record high of 12 390.75 points in April. Some traders said they would look to play it safe by selling out on market rallies in case the market were to resume a downwards trajectory later.

"I think the best strategy for now is to sell into strength on the DAX," said Logic Investments' Ryan Mitchell.

European auto shares were the leading gainers with a bounce of 3.8%, while basic resources stocks and energy plays were lifted by higher commodity prices.

Volkswagen, which has admitted cheating on exhaust emissions tests, rose 2%, although its shares are still down some 30% on the week.

Traders said signs that VW would name Matthias Mueller, head of its Porsche sports car brand, as chief executive showed VW's determination to tackle the crisis.

Rival carmaker BMW also rose 4.6% after German car magazine Auto Bild clarified an earlier report to say it had no evidence of emissions data manipulation at the company.

Zodiac Aerospace slid 6.1% after media reports and an industry blog said the French company - which makes airplane seats and other equipment - had lost a contract with American Airlines, one of its main clients.

However, France's benchmark CAC equity index rose 2.6%, partly boosted by data showing a French consumer confidence index at its highest level since October 2007.

Some investors said they were positive on the longer-term outlook for European shares, despite the weak data coming out of China and a possible rise in US interest rates.

They pointed to signs of an economic improvement in Europe, and stimulus measures from the European Central Bank as helping to support the region's stock markets.