US data lift European stocks

European shares rose yesterday after data showing strong growth in the US services sector soothed concerns about a sharp US economic slowdown, while mining and energy stocks jumped on higher commodity prices.

By 1633 GMT, the FTSEurofirst 300 index of top European shares was unofficially closed 0.8 per cent higher at 1,440.9 points, taking gains for the year to date to 13 per cent.

Stocks extended gains after data showed the US services sector grew faster than expected last month, a relief for investors rattled by figures last week showing the US manufacturing sector contracting for the first time in three-and-a-half years.

"The report is rather good, with all its components coming stronger than expected. Of course this does not in itself revert the overall impression that the economy is slowing and that the property shock is spreading to the consumer," said Veronique Riches-Flores, an economist at Societe Generale in Paris.

US stocks were firmer as markets around Europe closed, with the Dow Jones industrial average up 0.2 per cent at 12,311.4 and the Nasdaq Composite up 0.3 per cent at 2,455.4.

Around Europe, London's FTSE 100 index rose 0.6 per cent while Frankfurt's DAX and the CAC 40 in Paris both rose 1.2 per cent.

Oil hitting a high above $63 a barrel lifted energy stocks, with Total up two per cent and BP up 1.9 per cent.

Miners such as Anglo-American, Rio Tinto and Antofagasta gained between 2.5 and five per cent as prices for copper, aluminium and silver all rose.