Evidence of a gradual acceleration in euro zone growth put the region's shares on course for their best week of the year on Friday and pushed the euro to a three-week high.
As well as the encouraging economic data, which helped take some of the sting out of Thursday's disappointing U.S. retail and unemployment figures, investors gave a cautious thumbs up to the latest changeover at the summit of Italian politics.
Stocks in Milan were Europe's best performers by some distance, rising 1.1 percent versus a 0.4 percent higher pan-European FTSEurofirst 300 index. In the debt market, Italian borrowing costs hovered near 8-year lows.
Italian center-left leader Matteo Renzi forced party rival Enrico Letta to resign as prime minister on Thursday after criticizing his government's failure to pass major reforms.
That means the country faces its third administration in a year, but the hope is the youthful, sharp-talking Renzi can breathe new life into efforts to streamline the euro zone's third largest economy.
"The appointment of Renzi is seen as something positive. He is a new politician who can take decisive action," BNP Paribas rate strategist Patrick Jacq said.
"This is not political uncertainty. In fact, the political situation in Italy now is clearer."
In the currency market, the euro traded at just under $1.37, within touching distance of a three-week high hit earlier in Asia.
Euro zone growth and the positive sentiment towards Italy helped its cause, although a softening dollar on the back of Thursday's lackluster data had an equal effect.
The mood was buoyed as fourth quarter economic growth in Germany and France marginally exceeded expectations and offered hope of a more robust 2014.
The euro zone-wide number is due at 1000 GMT and forecast to show quarterly growth of 0.2 percent, though given the performance of the bloc's top two economies, it may well exceed those bets.
"It (GDP data) will confirm there is a recovery in train in the euro zone which if you are an equity investor should at the margin bolster your confidence that the improvement is for real and sustainable," said Macquarie Capital strategist Daniel McCormack.
Early futures prices pointed to subdued end to the week for Wall Street though it, like European shares and MSCI's 45-country world index, was on course for its best week since the end of December.
Data from both the U.S. and China have been unconvincing recently but the wobbles have been offset by assurances from the Federal Reserve, European Central Bank and Bank of England that their supportive policies will remain in place if needed.
In Asian trading, share markets mostly rose to give MSCI's broadest index of Asia-Pacific shares outside Japan its biggest weekly gain since September.
Japan's Nikkei stock average underperformed its counterparts though, tumbling 1.5 percent for its sixth straight weekly losses as the yen continued to make ground against the weaker dollar.
"Japanese stocks have trouble advancing as overseas investors have become reticent," said Kenichi Hirano, a strategist at Tachibana Securities in Tokyo.
The weaker dollar helped point Asian emerging market currencies towards weekly gains as they continued to recover ground after last month's squalls.
The Indonesian rupiah hit a near 11-week high after data showed that country's current account deficit narrowed sharply in the fourth quarter, though both the Russian rouble and Nigerian Naira remained under pressure.
The yield on benchmark 10-year Treasury notes dipped after Thursday's data but climbed back to just under 2.74 percent in early European trade, pulling benchmark European German Bund yields in its wake
U.S. yields rallied this week after the U.S. Congress approved an increase in the debt limit and incoming Federal Reserve Chair Janet Yellen maintained the central bank's commitment to gradually withdraw its stimulus.
In commodities trading, U.S. crude slipped about 0.2 percent to $100.13 a barrel after skidding on the previous session's dismal U.S. data. Brent crude also edged down about 0.1 percent to $108.40.
Spot gold added about 0.3 percent in Asian trading to $1,306.90 an ounce, after hitting a three-month high of $1,307.80 earlier in the session.
The U.S. data gave gold futures a lift and helped them post their eighth straight gaining session - the longest winning streak since July 2011.
(Additional reporting by Marius Zaharia in London and Lisa Twaronite in Tokyo; Editing by John Stonestreet)