European stocks hit three-week closing high on Chinese data

European shares hit a three-week closing high yesterday, boosted by financials and miners and a renewed appetite for risk following positive macro-economic data from China.

Comments from Federal Reserve officials reinforcing the view that US interest rates will remain near zero for some time also supported stocks, but pushed the dollar to a 15-month low before the currency recovered in a technical rebound.

The FTSEurofirst 300 index of top European shares ended up 0.4 per cent at 1,013.87 points, the highest close since October 22. The index, which has gained in five of six sessions, is up 22 per cent in 2009 and has surged 57 per cent since hitting a record low in early March. Banks were among the top gainers, with France's biggest retail bank Credit Agricole rising 5.6 per cent after the lender's third quarter net profit fell less than expected and the bank chose a new chief executive.

Across Europe, Britain's FTSE 100 index, Germany's DAX and France's CAC 40 rose 0.7 to one per cent. Standard Chartered, HSBC, Lloyds, BNP Paribas, Société Générale, Natixis and UBS rose 0.9 to 4.7 per cent.

"Positive macro-economic data from China helped the market today," said Tammo Greetfeld, equity strategist at UniCredit.

"The recent macro data has alleviated some concerns and we are convinced that the equity market will get a tailwind from positive data in the coming months. We think that the cyclical high in equities is still to come," he added. Chinese factory output growth surged to a 19-month high last month, showing the world's third-largest economy has put the worst of the global financial crisis behind it.

Insurers also gained. ING rose 6.6 per cent after posting a third-quarter profit in line with pre-announced results and said it has received strong interest in its insurance business, which is up for sale.

The VDAX-NEW volatility index fell to a two-week low. The lower the index, which is based on sell and buy options on Frankfurt's top-30 stocks, the higher is the risk appetite.