European shares opened cautiously on Friday as investors pinned their hopes on a diplomatic resolution to the Russia-Ukraine crisis and UK retail sales bounced back in January.
The pan-European Stoxx 600 index rose 0.17% in early deals, shrugging off heavy falls on Wall Street and a mixed performance in Asia. US futures were indicating a higher opening.
US Secretary of State Antony Blinken agreed to a meeting with Russia’s foreign minister late next week provided Russia does not invade Ukraine, the US State Department said overnight.
Russia maintains it is withdrawing soldiers from Ukraine’s borders, but Washington on Thursday said the claim was false and accused Moscow of increasing troop numbers on the ground.
Tensions were heightened after the shelling of a village in Eastern Ukraine by pro-Russian forces in the Donbas region on Thursday.
“It is becoming increasingly clear that the US appears to think a Russian invasion is only a matter of time, and whether it comes this week, or in a few days, US officials want it to be clear that if, and when it does happen, Russia won’t be able to hide behind a ‘false flag’ event to justify it,” said CMC Markets analyst Michael Hewson.
In the UK, retail sales bounced back in January as shoppers hit the high streets again, according to figures released on Friday by the Office for National Statistics.
Sales rose 1.9% following a 4% slump December, when Omicron took its toll. This was ahead of analyst expectations for a 1% increase and marked the strongest monthly jump since lockdown ended last Spring. It left sales volumes 3.6% above their pre-pandemic levels.
UK traders were also eyeing Storm Eunice, which has led to red weather alerts across Britain.
In equity news, shares in Finnish pharmaceutical company Orion soared by almost 25% after positive results from a trial of its prostate cancer drug.
UK builder Kingspan gained after the insulation specialist said it had spent €800m on acquisitions since the start of the year, it said after posting a 49% annual profit jump.
Shares in French luxury group Hermes fell after the company said sales grew by 11% in the fourth quarter of 2021, as self-imposed production caps meant the group could not keep up with demand for its prized handbags.
