European shares retreated on Friday and were poised to snap a three-day winning streak as traders gauged the prospects of a prolonged global monetary policy tightening, while German footwear maker Adidas' dour forecast also dampened sentiment.

The pan-European STOXX 600 was down 0.6% by 0815 GMT, after touching a near one-year high on Thursday as a slew of upbeat corporate earnings gave a fillip to risk-on sentiment.

Retail and basic resources, down around 1% each, were the worst performers among sector indexes.

Swedish defence equipment maker Saab jumped 8.8% to top the STOXX 600 index on higher fourth-quarter operating profit. Aiding sentiment, the company also forecast its organic sales growing 15% in 2023 and operating income rising faster than revenue.

Shares of Adidas dropped 9.4% and were on track for their steepest one-day fall in 11 months on expectations of a high single-digit decline in 2023 sales, also pulling down peer PUMA SE by 2%.

Britain's Standard Chartered slid 5.7% and was on track for its steepest one-day fall in six months after First Abu Dhabi Bank, the United Arab Emirates' biggest lender, said it was not currently evaluating a buyout offer. (Reporting by Ankika Biswas in Bengaluru; Editing by Sherry Jacob-Phillips)