European markets traded broadly higher on Friday and were poised to close the week in positive territory, supported by upbeat corporate earnings and a moderation in concerns surrounding artificial intelligence valuations.
Gains were tempered, however, by lingering geopolitical strains. U.S. President Donald Trump issued a 10- to 15-day ultimatum for Iran to agree to a nuclear accord or face “bad things.” In response, Iran signaled that American military bases across the Middle East could become “legitimate targets” in the event of a U.S. strike.
Adding to the tension, reports indicated that British Prime Minister Keir Starmer declined a request from Trump to permit U.S. forces to operate from U.K. air bases in any potential pre-emptive action against Iran, citing concerns over possible violations of international law.
On the economic front, data from the Office for National Statistics showed that U.K. retail sales surged in January, marking the strongest monthly increase since May 2024. Sales climbed 1.8% month over month, following a 0.4% rise in December, partly driven by stronger purchases of artwork and antiques. On an annual basis, retail sales growth accelerated to 4.5% from 1.9% the previous month.
Elsewhere, survey data indicated that business activity across the euro area expanded at a faster pace than economists had anticipated this month.
In market performance, France’s CAC 40 advanced 0.7%, the U.K.’s FTSE 100 gained 0.5%, and Germany’s DAX rose 0.2%.
Among individual stocks, Italian luxury house Moncler (BIT:MONC) surged after reporting a 7% increase in fourth-quarter revenue at constant exchange rates, fueled by robust demand in Asia and the Americas.
French industrial gas supplier Air Liquide (EU:AI) also rallied after posting higher full-year net income, reaffirming its 2026 margin outlook and introducing a new operating margin target for 2027.
Swiss Re (TG:SR9) moved higher as well after agreeing to acquire QBE Insurance Group’s global trade credit and surety operations.
In contrast, London-listed Tullow Oil (LSE:TLW) declined after its 2025 revenue fell short of market expectations.
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