(Investing.com) European stock markets edged higher, rebounding after the previous session's hefty losses with investors digesting strong U.K. growth, the hawkish ECB stance, and the continuing war in Ukraine.
By 3:55 AM ET (0855 GMT), the DAX in Germany traded 0.5% lower, the CAC 40 in France traded flat, while the U.K.’sU.K.'s FTSE 100 outperformed, rising 0.7%.
Data released earlier Friday showed that Britain's economy rebounded much more than expected in January, with gross domestic product growing by 0.8% on the month after a 0.2% decline in December.
The Bank of England meets next week, and these upbeat numbers can only bolster the chances of the central bank lifting interest rates for the third time in the space of three months.
European equities closed sharply lower Thursday after talks between the foreign ministers of Russia and Ukraine failed to bring about a ceasefire to the conflict that has roiled markets over the last couple of weeks, with commodity prices and oil, in particular, soaring to record levels.
Further moves to punish Russia are expected on Friday, with the United States, the European Union, and other allied nations set to revoke Russia's "most favored nation" trading status. This would then allow for the imposition of tariffs on a wide range of Russian goods, further hurting the country's economy.
On Thursday, the Institute of International Finance cut its 2022 Russian GDP growth expectation, saying Moscow's economy will contract by some 15% this year due to the severity of sanctions, having previously had a 3% growth estimate.
On Thursday, the European Central Bank surprised investors by taking a relatively hawkish tone, announcing it would be speeding up its plans to tighten monetary policy, phasing out all of its asset purchases in the summer if inflation fails to come down fast enough.
Incorporate news, Credit Suisse's (SIX: CSGN) stock rose 0.4% after Switzerland's second-largest bank set new targets to nearly halve its exposure to the financing of emissions from oil, gas, and coal by the end of 2030.
Deutsche Bank (DE: DBKGn) stock rose 0.5% after the German lender announced it paid 14% more in bonuses for 2021, rewarding staff for the bank's most profitable year in a decade.
Oil prices stabilized on Friday but still looked set for the most significant weekly drop since November 2021, amid uncertainty over global production levels in a week marked by talk of potential supply additions, mainly from the United Arab Emirates, as well as additional sanctions on Russia.
By 3.55 AM ET, U.S. crude futures traded 2.6% higher at $108.68 a barrel, heading for a weekly drop of around 8% after touching a high of $130.50, while the Brent contract rose 3.1% to $112.74, set for a weekly fall of about 7% after hitting a 14-year high of $139.13.
Additionally, gold futures fell 0.1% to $1,999.80/oz, while EUR/USD traded 0.1% lower at 1.0979.