European stocks edged up in early trade Friday, extending a succession of multiyear highs this week.

The Stoxx Europe 600 index rose 0.2%, having surged 1% to its highest close in more than seven years on Thursday.

The rally of the past few days has come as fears surrounding Greece’s bailout eased, and investors anticipate the start of the European Central Bank’s massive bond-buying stimulus program next month. Earlier this week an agreement to extend Athens’s financial-aid package was approved by European leaders.

Government bond prices across the eurozone touched new highs on Thursday, with investors betting that ECB buying in a market with few high-quality bonds available could have a bigger impact than previously thought.

The quantitative easing that is starting soon should keep European assets in high demand for a while, said BNP Paribas strategist Ankit Gheedia.

German 10-year bond yields edged up slightly to 0.32%, still close to Thursday’s all-time low. Low yields reflect high prices. The shrinking returns on bonds make stocks look cheap by comparison, analysts say.

The relative valuation arguments continue to strongly favor equities, said Ian Williams, economist and strategist at brokerage Peel Hunt.

Major indexes in the eurozone were a touch higher, with Germany’s DAX adding 0.1% to trade at a new all-time high, and France’s CAC 40 also up 0.1%.

The announcement of ECB stimulus has also driven down the euro so far this year. The currency touched a one-month low against the dollar on Thursday after U.S. inflation data came in slightly higher than expected.

The euro hovered close to that level on Friday at around $1.12.

Elsewhere, the British pound was also steady against the dollar at $1.5418, and London’s FTSE 100 was marginally lower.

In commodities markets, Brent crude surged 1.9% to $61.22 a barrel. Gold was down 0.1% at $1,209.00 an ounce.

Write to Tommy Stubbington at tommy.stubbington@wsj.com

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(END) Dow Jones Newswires

February 27, 2015 04:25 ET (09:25 GMT)