Europe's main stock markets rebounded strongly on Friday as traders welcomed some clarity from Federal Reserve chief Janet Yellen on the outlook for US interest rates, analysts said.

However, a rally by Volkswagen shares on expectations the company would imminently name a new chief executive to steer it out of the wreckage of a pollution test rigging scandal ran out of fuel as the company's problems mounted.

London's benchmark FTSE 100 index closed 2.47 percent higher at 6,109.01 points.

In the eurozone, Frankfurt's DAX 30 ended the day 2.77 percent ahead at 9,688.53 points and Paris's CAC 40 jumped 3.07 percent to 4,480.66 points compared to Thursday's close.

Milan advanced 3.68 percent and Madrid 2.45 percent.

The euro dropped to $1.1193 from $1.1230 late on Thursday in New York, with the US currency winning strong support from the prospect of a Fed rate rise before the end of the year.

European stock markets had closed lower Thursday following another volatile day of trading, as a spreading Volkswagen scandal offset positive German data.

But equities fought back Friday, mirroring strong gains in Tokyo, after Yellen hinted at a US rate hike by the end of 2015.

Wall Street stocks climbed mostly higher on Yellen's comments and the Commerce Department's report that the US economy grew at a peppy 3.9 percent rate in the second quarter, up from the 3.7 percent previously estimated.

The Dow Jones Industrial Average rose 1.16 percent to 16,390.03 points in mid-day trading.

The tech-rich Nasdaq Composite Index gained 0.41 percent to 4,753.62 points, though the broad-based S&P 500 slipped 0.34 percent to 1,932.24 after an initial rise.

"An improvement on an already strong second quarter GDP figure, with the final number creeping up to 3.9% from the 3.7% initial reading, appeared to take the edge off the Dow Jones at the open... European indices by and large underwent the same motions as the Dow did this afternoon," said Spreadex analyst Connor Campbell.

- Yellen makes investors 'chirpier' -

On Thursday, Yellen said that she still expects to increase interest rates in 2015 and that concerns about weaker global growth were unlikely to affect the plan.

Her remarks came a week after the US central bank opted at a widely anticipated meeting against enacting the first rate hike in nearly 10 years.

"Investors are chirpier... on the back of Janet Yellen's comments confirming the US economy is in rude health," said Mike McCudden, head of derivatives at stockbroker Interactive Investor.

Following the September 17 meeting, Yellen told a news conference that the committee decided to hold off owing to worries about slowing growth in China and capital flight from emerging markets.

"With equities having sold off following the Fed's decision to leave rates on hold last week, the bullish (market)... reaction suggests investors would prefer the Fed to get on with it and raise rates sooner rather than later," said Mike van Dulken, analyst at Accendo Markets trading group.

In Thursday's speech, Yellen said policymakers were still "monitoring developments abroad" but did not think they would derail the US economy.

"As we come to the end of a turbulent (trading) week, where pretty much every sector has felt the chill winds of selling pressure, the health of the global economy continues to come under singular scrutiny, with emerging markets in particular the source of increasing concern," said Michael Hewson, chief market analyst at CMC Markets UK.

"We continue to hear a lot of reassuring words that China's economy is not heading for a hard landing, and while that may be true major corporates appear to be concerned enough to take steps to shore up their balance sheets."

- VW yo-yo -

Volkswagen shares continued to see-saw on Friday, jumping more than four percent at the opening of trading ahead of the announcement of Porsche chief Matthias Mueller its new chief executive.

But the company's shares slumped by more four percent in the afternoon after Germany's transportation minister said 2.8 million VW cars in the country had been fitted with software to defeat pollution tests.

At the close of trade, VW stocks were 4.32 percent down on the day at 107.30 euros, off from the intraday high of 117 euros in the first few minutes after the market opened.

Asian shares ended mixed Friday, with Tokyo gaining 1.76 percent while Shanghai shed 1.60 percent.

In other markets Hong Kong closed 0.43 percent higher after a two-day losing run but Sydney fell 1.60 percent and Seoul lost 0.22 percent.