Europe open: Stocks extend gains despite grim German factory data

"US markets are back at record highs, while the Dax seems prepared to follow suit, even if it is displaying further caution around the 13,600 mark, the peak of the past two years," said IG's chief market analyst Chris Beauchamp.

"Some of the strength in European markets will be down to the utterly abysmal performance of the euro this week, which has conspicuously failed to follow up on the strength displayed at the end of January, and has instead fallen right back to $1.10."

As of 1031 GMT, the benchmark Stoxx 600 was edging up 0.30% to 424.89, alongside a 0.68% rise for the German Dax to 13,568.62 and a 0.56% gain for the FTSE Mibtel to 24,369.73.

Shares of Deutsche Bank were the top gainer on the Stoxx 600, with news that it had clinched its first new major shareholder in over a year, US outfit Capital Group, pushing its shares to a new 52-week high.

Shares of Nordea Bank and Unicredit were rising alongside.

On the downside meanwhile, the worst performer was Swedish retailer ICA Gruppen, which posted a 1.6% dip in its fourth quarter profits to SEK 915.0m.

In the background, German factory data for December surprised sharply to the downside, falling at a month-on-month pace of 2.1%, instead of rising by 0.6% on the month as expected by analysts, as orders from overseas slumped by an outsized 4.5%.