European stocks rise on positive growth data
European stock markets rose yesterday after growth data suggested that prospects for core eurozone countries were slightly better than expected, analysts said.
A 0.8 per cent 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 per cent to close at 5,864.78 points, Frankfurt’s DAX 30 won 0.94 per cent to 6,974.39 points and in Paris the CAC 40 gained 0.70 per cent to 3,450.27 points.
Madrid rose by 0.78 per cent and Milan was up by 0.85 per cent.
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, adding that however 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 per cent to 13,209.58 points in mid-day trading.
The broader S&P 500-stock index gained 0.36 per cent to 1,409.16 points, while the tech-rich Nasdaq was 0.31 per cent higher at 3,031.84 points.
In Europe, the German economy, the continent’s biggest, beat analysts’ expectations to grow by 0.3 per cent 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 yesterday that economic growth fell by 0.2 per cent 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.