By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Europe's benchmark stock index headed for a third-straight week of gains on Friday, with Valeo SA rallying after reporting earnings, and BAE Systems PLC and Rémy Cointreau SA climbing after broker upgrades.

The Stoxx Europe 600 index added 0.2% to 335.28, setting it on track for a 0.6% weekly advance.

The index broke a four-day winning streak on Thursday after disappointing Chinese manufacturing data stirred renewed concerns about slowing growth in emerging markets. In January, China's manufacturing purchasing managers' index also missed expectations and partly triggered a global market rout, where especially emerging-market currencies were hit hard.

In Friday's trade, shares of Valeo rallied 10% after the French auto-parts maker said profit rose 18% in 2013.

Rémy Cointreau SA gained 5% after Barclays lifted the spirits maker to overweight from equal weight. The analysts said it is the drinks maker most-geared toward China and will benefit from "low penetration rates and attractive wealth demographics" in the country.

Shares of BAE Systems (BAESY) added 1.3% after Société Générale lifted the aerospace and defense firm to buy from hold, according to Dow Jones Newswires. On Thursday, the U.K. company dropped 8.3% after posting a fall in 2013 profit.

Shares of AXA SA slipped 2.2% after the insurer posted full-year profit below market expectations.

On the data front in Europe, investors waited for U.K. retail sales due at 9:30 a.m. London Time, or 4:30 a.m. Eastern Time. In the U.S., existing home sales are likely to grab the attention when they are released at 3 p.m. London time. U.S. stock futures pointed to a higher open on Wall Street.

In Europe, the U.K.'s FTSE 100 index gained 0.5% to 6,844.15, France's CAC 40 index was slightly lower at 4,354.66, and Germany's DAX 30 index fell 0.1% to 9,609.71.

The Frankfurt benchmark was weighed by Deutsche Bank AG, (DB) off 0.6%, and Siemens AG (SI), 0.4% lower.

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