Investor sentiment was balancing between hope and caution; hope from the small improvement apparent in U.S. economic indicators and caution ahead of the U.S. jobs report, which turned out to be better than expected, giving the end of the week a good performance.

Gains, which initially were modest as investors were cautious before the payrolls report, picked up afterwards although the jobless rate rose slightly to 9.6 percent from 9.5 percent in July.

After the sharp drop in global markets in....