European markets closed in positive territory on Friday with London's FTSE 100 ending the session at a record high.

The pan-European Stoxx 600 index ended Friday 0.68% higher, with nearly all sectors and all major bourses in the green. Mining stocks led the gains, with the sector up 2% after Bloomberg reported Glencore had been in talks with Rio Tinto to explore the industry's largest ever merger. Novo Nordisk was the one of biggest detractors sliding by 4.3%.

The U.K.'s mining-heavy FTSE 100 index strengthened provisionally by 1.35% to surpass a record close above 8,500 points.

The rise came even as investors assessed disappointing U.K. data on Friday, with the ONS estimating December retail sales fell 0.3% on a month-on-month basis. Economists polled by Reuters had anticipated a 0.4% rise in sales volumes from the previous month.

Earlier in the week, U.K. economic growth figures for November came in weaker than expected, while inflation eased more than anticipated to 2.5%.

The combination of all three led traders to add to bets on the extend of Bank of England interest rate cuts this year, with more than 70 basis points in trims priced in by late morning, up from around 65 basis points the previous day.

That in turn placed pressure on the British pound, which was 0.3% lower against the U.S. dollar, but helped with a recent cooling of U.K. borrowing costs, which were broadly lower Friday after spiking to decade-highs last week.

Source : CNBC