European shares log best week in two months despite volatility

European shares notched up their best week in two months on Friday as concerns over an energy supply crunch eased, bringing some calm to investors worried about a big rise in interest rates and a political crisis in Italy. The pan-European STOXX 600 index closed 0.3% up at its highest level since June 10, while for the week it jumped nearly 2.9%. While Russian gas flows to Europe resumed after a scheduled maintenance outage, market participants fretted as euro zone business activity unexpectedly shrank in July, due to a downturn in manufacturing and a near-stalling of service sector growth.