European stocks rally on bright growth data

Europe's stock markets pushed higher Wednesday on news of solid first quarter economic growth in the eurozone, with France outpacing powerhouse Germany, and on bright company results.

In mid-afternoon trading in Paris, the benchmark CAC 40 index of leading French companies jumped 0.91 percent to 5,020.02 points compared with Tuesday's close, while Frankfurt's DAX 30 edged up 0.08 percent to 11,481.44.

London's FTSE 100, meantime rose 0.41 percent to 6,962.3 points after upbeat British unemployment data.

The euro nudged up to $1.1310 from $1.1213 late in New York on Tuesday on the positive economic news issuing from Europe.

US stocks opened higher, shaking off two straight sessions afer a weak April retail sales report spurred expectations the Federal Reserve would delay raising interest rates.

Five minutes into trade, the Dow Jones Industrial Average had gained 0.31 percent to 18,123.82 points.

The broad-based S&P 500 advanced 0.49 percent to 2,109.48 points, while the tech-rich Nasdaq Composite Index added 0.67 percent at 5,009.64.
European equities had slumped on Tuesday as Athens warned it could run out of cash in two weeks with debt repayments looming, sparking renewed worries of a Greek euro exit.

"GDP was the name of the game in the eurozone, providing a brief respite from the suffocating Greek situation that helped inspire Tuesday’s deep declines," said analyst Connor Campbell at trading firm Spreadex on Wednesday.

Economic growth in the 19-nation eurozone strengthened to 0.4 percent in the first quarter, official EU data showed Wednesday, in line with expectations and up from 0.3 percent in the final three months of 2014.

Growth slowed in Germany, Europe's biggest economy, to 0.3 percent in the same period, from 0.7 percent.

France was surprisingly the star performer, experiencing its strongest growth in nearly two years, with GDP expanding by 0.6 percent from zero percent at the end of last year.

- Greece enters new recession -

Striking a gloomier note, Greece plunged back into recession, defined as two quarters of successive negative economic growth.

The Greek economy shrank by 0.2 percent in the first quarter of this year, after a 0.4-percent contraction late last year.
The Greek recession coincided with a return to political uncertainty in the country and doubt over its 240-billion-euro ($270 billion) international bailout.

“While all attention on Greece has been focused on the prolonged negotiations with creditors, the economic data has taken a step backwards in 2015," said FXTM analyst Jameel Ahmad.

"We are noticing that European economies are benefiting from a mixture of the ECB's policies ... and budgets being eased following the decline in the price of oil, but it is clear that Greece is being left behind."

In Paris, shares in Bouygues soared to the top of the CAC 40 risers board after the French conglomerate reported a smaller-than-expected first-quarter net loss of 157 million euros ($176 million).

In reaction, Bouygues shares rallied 3.17 percent to 38.13 euros.

Back in London, paper company Mondi saw its shares rocket 9.78 percent to 1,425 pence, topping the FTSE 100 after revealing that first-quarter operating profits jumped by almost a third.

In second place, shares in British property builder Barratt Developments gained 4.31 percent to 569 pence after it reported strong demand for new build homes across Britain in the group's third quarter or 19 weeks to May 10.

Asian equity markets mostly rose Wednesday, brushing off another sell-off on Wall Street, but Shanghai and Hong Kong retreated after a further batch of weak data indicated ongoing weakness in the Chinese economy.