European stocks rise on positive growth data

European stock markets rose on Tuesday after growth data suggested that prospects for core eurozone countries were slightly better than expected, analysts said.

A 0.8 percent rise in July US retail sales also helped boost sentiment, with Wall Street trading on the plus side in midday action as well.

In London the FTSE 100 index of leading companies added 0.56 percent to close at 5,864.78 points, Frankfurt's DAX 30 won 0.94 percent to 6,974.39 points and in Paris the CAC 40 gained 0.70 percent to 3,450.27 points.

Madrid rose by 0.78 percent and Milan was up by 0.85 percent.

In foreign exchange deals, the European single currency traded at $1.2334 which was essentially unchanged from $1.2333 late on Monday in New York.

"Slightly better than expected French and German GDP (gross domestic product) numbers have helped buoy European markets today," CMC Markets analyst Michael Hewson noted.

He added however that the figures "don't disguise the fact that the growth gap is getting wider between the core European countries and the peripheral economies currently buckling under austerity programmes and lower tax revenues."

In New York, stocks were buoyed by data showing sales grew at the strongest pace since February. With consumer spending accounting for around two-thirds of the US economy, the data augurs well for the third quarter growth.

The Dow Jones Industrial Average added 0.30 percent to 13,209.58 points in midday trading.

The broader S&P 500-stock index gained 0.36 percent to 1,409.16 points, while the tech-rich Nasdaq was 0.31 percent higher at 3,031.84 points.

In Europe, the German economy, the continent's biggest, beat analysts' expectations to grow by 0.3 percent in the second quarter owing to rising exports and solid domestic demand, official data showed.

The French economy, the eurozone's second biggest, posted zero growth in the second quarter, defying forecasts that it would begin to slide into recession amid the ongoing eurozone debt crisis.

A recession is defined by economists as two consecutive quarters of contracting activity.

The EU statistics office Eurostat estimated Tuesday that economic growth fell by 0.2 percent for the eurozone as a whole in the second quarter compared with the first three months of the year.

In the first quarter, GDP growth stood at zero in both the 27-member EU and the smaller group of 17 EU members that use the single currency.

The figures reflect the debt crisis that has engulfed the eurozone, forcing EU-IMF bailouts for Greece, Ireland and Portugal and aid for the Spanish banking sector, while battering market confidence.

"Following on from the better than expected French, German and Dutch GDP data, the as-expected eurozone number highlights the weakness in other parts of the region, most specifically the weakness in Italy and Spain and the periphery," said Rabobank analyst Jane Foley.

"Recessionary conditions in Italy, Spain and non core countries highlight the difficulties in seeing through structural reform and pacifying bond investors and serve as a reminder that the debt crisis has further to run," she added.

Asian stock markets closed higher in quiet trade amid the prospect of fresh stimulus moves by global central banks.

Tokyo stocks gained 0.50 percent and Seoul added 1.27 percent, while Sydney was up 0.21 percent. Hong Kong rallied 1.05 percent and Shanghai ended 0.30-percent higher.

In London, shares in the Standard Chartered bank continued to bounce back, gaining 1.51 percent to 1,353.5 pence as chief executive Peter Sands was in New York and ready, if necessary, to speak with a New York State regulator.

The state's Department of Financial Services (DFS) alleges that Standard Chartered hid $250 billion (203 billion euros) in transactions with Iranian banks for almost a decade.

Sands told India's Business Standard newspaper that the bank seeks "to comply at all times with the relevant laws."

Source: http://news.yahoo.com/european-stocks-rise-positive-growth-data-133231630.html

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