Automotive stocks led the gains on better-than-expected U.S. car sales data, and the sector was up 1.9 percent. Fiat Chrysler was the sector's top performer, up 8 percent.
As European indexes rallied, Britain's FTSE 100 hit a record high of 7,701.93 at about 3 p.m. London time.
Looking at individual stocks, Steinhoff extended its recovery from the start of the new year as shares skyrocketed more than 21 percent on Thursday. The embattled South African retailer had seen shares tank in December after its CEO quit amid a probe into accounting errors.
Meanwhile, Remy Cointreau slumped to the bottom of the benchmark, after Investec cut its stock recommendation to "sell" from "hold". Shares of the French spirits group slipped 3.6 percent on the news.
On the data front, services PMI data showed the euro area was hovering close to its best growth in seven years, while Spain and Italy both beat the previous flash estimates.
On Wall Street, the Dow Jones industrial average broke above 25,000 for the first time following the release of stronger-than-expected jobs data.