By Josie Cox

Geopolitics remained the center of European markets' attention Friday, with investors taking comfort from Russian President Vladimir Putin's conciliatory remarks, despite the tense situation close to Ukraine's border.

In early trade, the Stoxx Europe 600 rose 0.3% with France's CAC and Germany's CAC both adding 0.2%, extending gains from the previous session.

In a speech to Russian parliamentary leaders and Crimean lawmakers late Thursday, Mr. Putin said that Russia would do everything in its power to halt the conflict in eastern Ukraine, marking a change in tone from recent public appearances during which he has castigated the U.S. and Europe for provoking a confrontation over Ukraine.

"Investors have drawn some comfort from these comments," Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ wrote in a note to clients.

At the same time, however, a convoy of Russian trucks, filled with what Moscow says is humanitarian aid for Ukraine's war-torn east, stopped just short of a rebel-controlled part of the border Thursday, raising fears that it would cross without permission from Kiev and dramatically escalate tensions with the West.

In the U.K, the FTSE added 0.3%, ahead of the second release of country's gross domestic product figures. Last month, the first release showed that the country's economy had grown 3.2% on an annualized basis in the three months to June, putting it on track to be one of the fastest-growing major advanced economies this year.

The numbers will follow a dismal set of figures out of the euro area onThursday, showing that the region stalled in the second quarter. Germany's economy, for a long time considered Europe's growth engine, shrank for the first time in more than a year, while France's economy was unchanged for a second straight quarter.

Last week, data showed that Italy has slipped into its third recession since 2008, already sparking concerns that Europe's fragile economy is crumbling.

Despite an initial fall, however, markets broadly closed the session higher, with some strategists saying that the data represented a setback rather than a fully-fledged trend reversal.

Barclays economists said in a note to clients that markets Thursday were bolstered by "the 'good news is bad news' presumption that weak economic data would elicit an expansionary policy response" from the European Central Bank.

Activity was muted in currency markets Friday, with the euro unchanged against the U.S. dollar at $1.3367 and the British pound at GBP0.8013.

Mr. Hardman said that the improvement in global risk sentiment was supportive for high yielding carry currencies. The Australian and Canadian dollars, however were trading broadly steady against the euro and U.S. dollar.

In commodities, gold was trading 0.1% lower at $1,314.80 a troy ounce. Brent crude was 0.2% higher at $102.28 a barrel.

Write to Josie Cox at

(END) Dow Jones Newswires

August 15, 2014 04:43 ET (08:43 GMT)

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