European stocks closed higher on Friday, in their third straight week of gains.
The pan-European FTSEurofirst 300 Index provisionally closed higher by 0.3 percent at 1,342.93 points. France's CAC 40 posted a five-and-half-year high and the FTSE 100 Index also closed in on an all-time high.
For the week, the FTSE closed up 2.63 percent while the CAC 40 was higher by 0.96 percent. The DAX was flat for the week.
Investor confidence was buoyant, taking direction from Wall Street, where the index was on track for a third weekly gain after better-than-expected results from technology companies including Hewlett-Packard.
The Italian FTSE MIB provisionally closed down 0.3 percent on the day, as Italian center-left leader Matteo Renzi worked to finalize the new cabinet.The government will be sworn in by the weekend, ahead of a confidence vote in parliament expected on Monday.
Meanwhile, U.K. retail sales slumped 1.5 percent in January, failing to meet analysts' predictions. However, the stellar uptick in December was cited as a reason for the decline, with the yearly picture still showing strength for the U.K. consumer.
Ukraine in focus
In Ukraine, the presidency reached a deal with the opposition to end the country's deadly violence, after overnight talks with EU ministers. .
In a statement made Friday, the country's beleaguered president, Viktor Yanukovych, announced plans to hold an early presidential election, make changes to the constitution to limit presidential power, and form a national unity government.
S&P said the political situation in Ukraine has "deteriorated substantially" and the country was likely to default in the "absence of significantly favorable changes in circumstances". The agency lowered Ukraine's long-term foreign currency sovereign credit rating by one notch to "CCC".
Valeo shares surge
In stocks news, shares of France's second-biggest auto-parts maker Valeo closed higher by 12.6 percent after reporting second-half results. Strong demand from China helped profits, and the group's stock was upgraded by Natixis, Citigroup and Societe Generale.
UBS raised its price target on Vodafone on Friday. The heavily traded U.K.-based telecom giant saw its shares rise 3 percent at Friday's close.
However, shares of Kering — which owns luxury brand Gucci — closed lower by roughly 2.2 percent after announcing that it continued to see sales growth slow in its fourth-quarter results.
(Read more: Gucci loses shine but Kering CEO 'not worried')
Follow us on Twitter: @CNBCWorld