LONDON (MarketWatch) -- European shares rebounded from early lows to trade with mild losses on Friday, as investors started to pick up shares in some companies battered in the previous session.

The pan-European Dow Jones Stoxx 600 index fell 0.5% to 238.75, off an intraday low of 235.91.

The index dropped 3.3% in a broad-based sell-off on Thursday following reports that Dubai is seeking to postpone repaying the debt of its corporate entity Dubai World.

Bank shares were particularly hard-hit on Thursday as investors tried to gauge exposure to Dubai woes but looked to be regaining some equilibrium on Friday.

"Overall we would argue the UAE direct loan exposure risk is to some extent over-discounted within global banks except for some selective banks," said analysts at J.P. Morgan.

"Within European banks, HSBC Holdings and Standard Chartered have the largest absolute exposures with $17.0 billion and $7.8 billion respectively, equivalent to 18% and 43% of group net asset value," the analysts added.

HSBC Holdings shares were down another 1.5% and Standard Chartered shares lost another 1.8% but many other lenders were higher.

National Bank of Greece shares were up 3.5% in Athens and Natixis shares advanced 1.9% in Paris.

Royal Bank of Scotland shares rose 4.4% in London after it also announced that it has officially signed a previously announced asset insurance deal with the U.K. government.

Regional equity markets were also off early lows.

The U.K. FTSE 100 index declined 0.4% to 5,171.09, the German DAX index fell 0.5% to 5,587.65 and the French CAC-40 index lost 0.3% to 3,668.65.

"I think that people are using [the Dubai drop] as a buying opportunity," said Heino Ruland, strategist at Ruland Research.

Whether markets in Europe can hold around current levels "will depend on what happens in today's short session in the U auto loan interest rates.S." Ruland added.

U.S. stock futures were pointing to a big drop on Wall Street. Dow Jones Industrial Average futures were down 237 points.

The U.S. markets were closed on Thursday for the Thanksgiving holiday so Friday will be investors' first chance to react to the news on Dubai. See Indications.

Ahead of the resumption of regular trading in New York for metals and oil, futures tumbled in electronic trading, with gold futures down $23.90 at $1,163.00. Read more on gold move.

Airlines and autos can be sensitive to changes in oil futures and there were gainers in both sectors on Friday in Europe, with BMW shares up 1.7% and Renault shares up 1.1% in the auto sector. Air France shares rose 1.5%.

Also, French consumer confidence jumped in November, boosted by rising optimism over personal finances and the general economic situation, the statistical agency Insee reported Friday.

"Recent data supports an upswing in European markets with leading indicators suggesting that the recovery is well under way" said Roger Guy and Guillaume Rambourg, managers of the Gartmore European Selected Opportunities Fund.

"Despite the recent consolidation we believe that the positive story for equities is pretty much intact for the next three-to-six months, with equity inflows, and yet more upgrades at the GDP and corporate earnings level," they added.

Companies that are less tied to the economic outlook were under pressure on Friday, with drugmaker Roche down 1.2% and food producer Nestle down 0.9%.

Europe Markets: Buyers emerge in battered Europe