European markets rise as Wall Street sentiment spills over

LONDON — European markets were in positive territory on Friday, buoyed by Wall Street's record-breaking rally on Thursday.

The pan-European Stoxx 600 was 0.4% higher at 9:42 a.m. in London (4:42 a.m. ET).

Global investors will be watching the latest developments between Ukraine and Russia on Friday amid warnings by NATO Secretary General Mark Rutte that Europe must be prepared for war.

"Russia has brought war back to Europe, and we must be prepared for the scale of war our grandparents or great-grandparents endured," he said.

It comes as Russia's central bank said Europe's plan to use frozen Russian assets to help Ukraine was illegal. European Union governments are looking to agree on the proposal on Friday, per reports.

On the theme of defense, the White House's new national security strategy spooked Europe last week as it warned the region faced "civilizational erasure" and questioned whether it could remain a geopolitical partner for the U.S., and fallout from the publication continues.

David Petraeus, the former CIA Director and a four-star US Army general, told CNBC on Thursday that it was no bad thing for European nations to get a wake-up call to prioritize their defense and security.

The strategy was, "in a way, going after the Europeans but, frankly, some of the Europeans needed to be gotten after because I watched as four different presidents tried to exhort the Europeans to do more for their own defense and now that's actually happening," he told CNBC's Dan Murphy in Abu Dhabi.

On individual stocks, French private equity Wendel leads the European index with gains of 5.8%, having moved 6% in early dealmaking, amid reports that it will hand out 1.6 billion euros ($1.88 billion) to investors by 2030.

At the other end of the index is new arrival, Magnum, which fell 1.5% from the previous session but pared some earlier losses. The ice cream name was spun out of Unilever on Monday, when its stock opened at 12.20 euros on the Amsterdam stock exchange, slightly below its reference share price of 12.80 euros.

Dutch semiconductor stock ASMI also sat at the bottom of the European benchmark as its share price moved 2% lower. It comes as an AI-led tech slide across the Atlantic saw Oracle, Nvidia, and CoreWeave in negative territory on Thursday. Shares in the U.S. stocks were also down in premarket trading on Friday.

Elsewhere, the U.K. economy unexpectedly contracted in the three months to October, according to official figures released Friday. Economists had expected 0% growth over the period.

Final inflation data is also expected from Germany, France, and Spain today.

Switzerland's central bank left rates unchanged on Thursday at 0%, citing inflation coming in slightly lower than expected.

The euro reached its highest point against the dollar since Oct. 3. on Thursday at $1.1738, as the U.S. currency continues to depreciate.

Asia-Pacific markets traded higher Friday, tracking Wall Street gains after two key benchmarks hit new records on the heels of the recent Federal Reserve decision to cut rates.

Stateside, futures tied to the Dow Jones Industrial Average were higher Thursday night after strong gains in value areas of the market pushed both the 30-stock index and the S&P 500 to fresh highs.

— CNBC's Holly Ellyatt contributed to this report.