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* Pan-European FTSEurofirst 300 index up 0.7 pct
* Carrefour rises as results show Europe improvement
* Hugo Boss shares fall over 10 pct on poor outlook
* Spanish index outperforms on strong banks
By Danilo Masoni and Atul Prakash
MILAN/LONDON, Oct 16 (Reuters) - European shares closed on Friday at their highest level in five weeks, helped by expectations monetary policy will remain accommodative, with French retailer Carrefour leading the advance on good quarterly results.
The pan-European FTSEurofirst 300 index rose 0.7 percent at 1,435.1 points, managing to end a volatile week with a slight gain. The index rose 4.4 percent last week.
The advance came as Wall Street edged higher and after strong gains in Asia with economic data easing concerns about the pace of recovery in the United States.
"Europe's main indices are attractively valued on a price-to-earnings basis, and with no shocks in the peak period of earnings reporting season in the U.S., it appears that equity investors may have found a base to build upon after the rout in August and September," said Lorne Baring, managing director of B Capital Wealth Management.
"Easy monetary conditions are clearly going to remain for some time and that is also bolstering sentiment at the moment. We would expect further gains after a rough period for global investors," he said.
Consumer prices fell in the year to September, official data confirmed on Friday. The evidence of inflation will keep pressure on the ECB to increase its asset purchases to boost prices.
Carrefour shares rose 6.6 percent after Europe's largest retailer reported on Friday that sales accelerated in the third quarter. That reflected an improved performance in southern Europe and resilience in Brazil despite a slowing economy.
European sales beat consensus estimates, Bernstein analysts said, with Spain and Italy particularly good. French sales were in line with expectations and not as strong as the performance Casino reported on Thursday.
Hugo Boss shares slumped 11 percent. The fashion house cut its 2015 sales and profit outlook as a slowdown in China and more hesitant shoppers in the United States hurt its third-quarter results.
The STOXX 600 Healthcare index was best performing sector, rising 1.8 percent. Insulin maker Novo Nordisk rose 4 percent after approval for rival AstraZeneca's AZN.L diabetes drug combination was withheld by U.S. health regulators.
Spanish blue-chip index IBEX outperformed the rest of Europe, lifted by gains in banks Santander, BBVA and Banco Popular of between 3 and 1.5 percent. Talk of a sovereign rating upgrade of Spain, which pushed government bond yields lower on Friday, helped banking stocks, which also offered attractive valuations, said Beka Finance analyst Javier Bernat.
The STOXX Europe 600 Oil and Gas index rose almost 1 percent, after crude oil prices ended week-long decline.
Nestle fell 1.8 percent after the world's largest packaged food company lowered its full-year outlook. A recall of Maggi noodles in India knocked sales and miscalculated rebates in the United States weighed on the Swiss company's profits.
Sweden's SKF fell 7.3 percent after the world's top bearings maker painted a downbeat picture for the industrial sector. It forecast weaker demand ahead as a global slowdown gathered pace, especially in North America and Asia.
Today's European research round-up (Additional reporting by Sudip Kar-Gupta; Editing by Larry King)