European stocks, euro rally

European economic growth data at the end of a choppy trading week.
London’s benchmark FTSE 100 index rose 0,72 percent to 5 987,76 points in late morning deals. Frankfurt’s DAX 30 added 0,35 percent to 7 468,17 points and in Paris the CAC 40 index gained 0,52 percent to 4 044,34.
In foreign exchange deals, the euro jumped as high as US$1,4340.
It later stood at US$1,4288, up from US$1,4244 late in New York on Thursday.
“The big news was Europe’s growth data for the first quarter of the year,” said Kathleen Brooks, research director at trading website Forex.com.
“France and Germany registered stellar growth in the first three months of the year, which helped boost the overall eurozone figure.”
Economic growth across the eurozone more than doubled to 0,8 percent in the first quarter of 2011 from output in the last three months of last year, led by Germany, as Italy only scraped into positive territory.
The flash estimate released by the European Union’s data agency on Friday showed accelerating growth from 0,3 percent in the previous quarter, and compared favourably with US growth of 0,4 percent quarter-on-quarter.
Germany, the biggest European economy, led the way, expanding by a quarterly 1,5 percent to a level last seen before the economic crisis in 2008, provisional data showed.
France had growth of 1 percent, the strongest rate since the second quarter of 2006, and Spain, a country said to hold the key to the eurozone debt crisis, turned in 0,3 percent as it picked up speed from the end of last year.
But in Italy, the economy grew by just 0,1 percent in the first quarter, less than economists had forecast.
Analysts highlighted the fact that the euro was also winning support from increased appetite for risk.
“The euro is also being driven by overall risk appetite and its bounce has coincided with strength in commodities and stocks and weakness in the dollar,” added Brooks.
“Thus, the euro is not only moving in line with internal factors, but it is also getting affected by investors’ appetite for risk.”
The Greek economy, meanwhile, grew by 0,8 percent in the first quarter from output in the fourth quarter of last year, a first official estimate showed on Friday. However, it shrank by 4,8 percent over 12 months.
Athens is currently undergoing a critical audit of its finances by experts from the European Union, the International Monetary Fund and the European Central Bank, which last year rescued the country from bankruptcy with a 110-billion-euro (US$158-billion) bailout loan. – AFP.