European shares closed higher on yesterday after data showed the United States had emerged from recession.
The FTSEurofirst 300 index of top European shares rose 1.8 per cent to close at 997.49 points, after hitting a three-week low of 974.50 points earlier in the session.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 rose between 1.1 and 1.7 per cent.
Wall Street was higher as European bourses were closing. The Dow Jones, S&P 500 and Nasdaq Composite were up between 1.3 and 1.5 per cent. The European benchmark is up more than 54 per cent from its lifetime low of March 9, as investors have become more confident on the prospects for economic recovery.
The United States is the latest major economy to come out of recession, joining others such as France and Germany.
"The GDP growth has taken an element of uncertainty out of the market," said Bob Parker, vice chairman of asset management at Credit Suisse. "It confirms that the recession in America is over and that is pulling cash back into the market."
"I don't think this is going to be the start of a major rally. There is a concern about what happens when central banks pursue exit strategies and take liquidity out of the market."
The US economy grew in the third quarter for the first time in a year as consumer spending and investment in new home-building rebounded, unofficially ending the worst recession in 70 years.
The Commerce Department, in its first estimate of third-quarter gross domestic product, said the economy grew at a 3.5 per cent annual rate, the fastest pace since the third quarter of 2007, and compared with market expectations for a 3.3 per cent growth rate. surged 17.7 per cent after tumbling for three consecutive sessions following ING's announced capital increase and the spin-off of its insurance business. The EU-imposed break-up and retrenchment of Dutch ING sparked fears that others could face tougher-than-expected sanctions in return for state aid. ING shares rose 7.9 per cent.
Some of the world's leading banks warned that bad debts could rise further in Europe next year, overshadowing an improvement in underlying earnings.
Royal Bank of Scotland rose 9.5 per cent.
Lloyds Banking Group ended the day 7.5 per cent higher after it inched closer to plugging a capital gap of more than £20 billion (€22 billion), boosting the British bank's shares on prospects a deal enabling it to stay out of a government-backed asset insurance scheme, could happen before the year end.
Banking index heavyweights to gain, following weakness in recent days, included Banco Santander, HSBC, and Société Générale, which rose between 1.4 and 5.9 per cent.