London (AFP) - European stocks ended the week higher on Friday, shrugging off the impact of simmering Ukraine tensions and a profits warning from supermarket giant Tesco.
Frankfurt's main DAX index ended up 0.08 percent to 9,470.17 points.
London's benchmark FTSE 100 gained 0.20 percent, ending on 6,819.75 points, while in Paris the CAC 40 rose 0.34 percent to 4,381.04 points by the close of trading.
European markets had dipped during the day after an upbeat start as uncertainty surrounding the Ukrainian conflict weighed on investors' minds.
The euro firmed, although new official eurozone data showed a further fall of inflation to 0.3 percent in August. Analysts said this increased the chances that the European Central Bank would ease its monetary policy further.
Wall Street opened on a solid note.
Europe's main stock markets had fallen on Thursday as claims of Russian troops actively fighting in east Ukraine raised concerns over a possible military confrontation between Kiev and its former Soviet master.
- Stocks uncertain -
The Ukraine crisis took a new twist on Friday after Russia warned of a "high risk" of disruptions to supplies of Russian gas to Europe as international tensions mounted.
"Although markets are trading a touch weaker over the last couple of sessions, they are not reacting as though this was a full on territorial invasion," said Capital Spreads dealer Jonathan Sudaria.
"However, Russia has persistently and consistently escalated the conflict but with no clear end objective."
In London, Britain's supermarket giant Tesco had its share price plunge by as much as eight percent after warning on profits and slashing its dividend. The group blamed challenging trade and high investment costs.
Trading profit was forecast at between £2.4 billion and £2.5 billion ($4.0 billion and $4.2 billion, 3.0 billion euros and 3.15 billion euros) in the 2014/2015 financial year, Tesco said. That was well below market expectations.
Tesco also slashed its interim shareholder dividend by a hefty 75 percent to 1.16 pence per share.
Britain's biggest retailer added that new chief executive Dave Lewis will start on Monday -- one month earlier than planned -- in order to carry out a review of every aspect of the business.
"Tesco has shocked the markets by announcing another profits warning, slashing its dividend by 75 percent and rushing in the new CEO Dave Lewis a month before he was originally due to start," said IG analyst Alistair McCaig.
"All this smacks of desperation... Unsurprisingly, UK food retailers dominate the list of stocks falling in the FTSE with Sainsbury, Morrisons and Marks & Spencers all tumbling," he added.
Tesco shares ended the day down 6.64 percent at 229.95 pence.
Sainsbury stock was down 4.35 percent at 290.30 pence, Morrison fell 5.03 percent to 177.50 pence and M&S slid 1.87 percent to 429.90 pence.
In foreign exchange activity, the European single currency firmed to $1.3155 from $1.3181 late in New York on Thursday.
The euro strengthened to 79.31 pence from 79.47 pence late in New York on Thursday, while the pound rose to $1.6586 from $1.6585.
The price of gold declined to $1,285.75 an ounce, from $1,292 on Thursday on the London Bullion Market.
- Wall Street opens up -
Markets in New York began the day higher.
By early afternoon on Wall Street, the Dow Jones Industrial Average was up 0.04 percent to 17,086.58.
The broad-market S&P 500 added 0.24 percent at 2,001.61, while the tech-rich Nasdaq Composite gained 0.36 percent to 4,573.89.
Analysts attributed the solid start to better-than-expected growth figures -- with the Commerce Department raising its estimate to 4.2 percent economic growth -- and remarks by President Barack Obama in a speech Thursday night in which he declined to call Russia's moves in Ukraine an invasion.
"While many would argue that is mere semantics the fact is markets appear more buoyant today," said Michael Hewson, chief market analyst at CMC Markets UK.