Investors breathed a sigh of relief as the end of a highly volatile week in European stock markets left the benchmark indexes largely unchanged from their starting positions. Stocks fell slightly in the run up to the close Friday, however, following speculation of profit warnings from Dutch banking groups ING and Fortis.
ING and Fortis declined to comment on the market talk, but stocks closed lower by 5.2 percent and 10.9 percent respectively.
In merger and acquisition news, Carlsberg and Heineken agreed to a joint bid of 800 pence a share for rival Scottish & Newcastle, which values the brewer at $15.28 billion. Shares of Scottish & Newcastle ended 2.2 percent higher.
In the Netherlands, supermarket group Ahold reported better-than-expected sales on “favorable conditions in Europe” but warned ongoing restructuring at its U.S. business would continue to impact margins. Shares were 1.7 percent higher.
The saga of France's Societe Generale continued, as the bank will face tough questions over its risk controls in the wake of one rogue trader who managed to rack up losses totaling $7.1 billion.
SocGen organized an $8.06 billion capital increase backed by rivals, but analysts and newspapers questioned the resilience of the bank’s independence.
The French bank's shares closed 2.6 percent lower.
In the energy markets, a lift the price of crude oil helped shares in the basic resource and energy sectors advance.
Miner Kazakhmys rose 5.2 percent, British Energy Group was up 5.7 percent and EDF rose 3.7 percent.
In Italy, Prime Minister Romano Prodi resigned Thursday night after losing the latest in a long line of no confidence votes.
Meanwhile, British Prime Minister Gordon Brown urged European and other countries to open up more to trade and investment to help offset the risk of a downturn in the global economy, while speaking the World Economic Forum in Davos.
- Reuters contributed to this report