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European stocks rise on China GDP, eyes on Yellen; Dax up 0.54%

Published 07/16/2014, 03:35 AM
Updated 07/16/2014, 03:35 AM
European stocks gain ground as Chinese data supports sentiment

European stocks gain ground as Chinese data supports sentiment

Investing.com - European stocks were higher on Wednesday, supported by the release of upbeat Chinese growth data and as markets awaited additional comments by Federal Reserve Chairwoman Janet Yellen later in the day.

During European morning trade, the DJ Euro Stoxx 50 gained 0.41%, France’s CAC 40 advanced 0.71%, while Germany’s DAX climbed 0.54%.

Market sentiment found support after official data earlier showed that China gross domestic product expanded by 2% in the second quarter, compared to expectations for 1.8% growth, after a rate of 1.4% growth in the first quarter.

On Tuesday, Ms. Yellen said interest rates could rise sooner if the labor market was to improve more quickly than expected. However, the Fed chair also said that if the economic recovery disappoints monetary policy would remain accommodative.

The remarks came during testimony to the Senate Banking Committee in Washington.

Ms. Yellen said the economy is continuing to improve but added that the recovery is not yet complete and reiterated that rates are likely to remain on hold for a considerable period after the bank’s quantitative easing program ends.

Financial stocks were broadly higher, as French lenders Societe Generale (PARIS:SOGN) and BNP Paribas (PARIS:BNPP) gained 0.89% and 0.62%, while Germany's Deutsche Bank (XETRA:DBKGn) advanced 0.64%.

Among peripheral lenders, Italy's Intesa Sanpaolo (MILAN:ISP) added 0.18%, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) rose 0.27% and 0.77% respectively.

Elsewhere, Italian gaming business Gtech (MILAN:GTCH) surged 3.31% after agreeing to buy International Game Technology (NYSE:IGT) for $4.7 billion.

In London, commodity-heavy FTSE 100 climbed 0.52%, supported by gains in the mining sector.

Shares in Bhp Billiton (LONDON:BLT) gained 0.43% and Glencore Xstrata (LONDON:GLEN) advanced 0.89%, while rivals Rio Tinto (LONDON:RIO) and Vedanta Resources (LONDON:VED) jumped 1.72% and 1.64% respectively.

Rio Tinto earlier announced that iron-ore production increased by 11% in the second quarter.

In the financial sector, stocks were also mostly higher. Lloyds Banking (LONDON:LLOY) edged up 0.14% and HSBC Holdings (LONDON:HSBA) climbed 0.68%, while Barclays (LONDON:BARC) rallied 1.10%. The Royal Bank of Scotland (LONDON:RBS) underperformed on the other hand, down 0.16%.

Meanwhile, Meggitt (LONDON:MGGT) led gains on the index, up 7.78%, amid reports United Technologies (NYSE:UTX) could be gearing up to launch a £5 billion cash bid for the engineering company.

In the U.S., equity markets pointed to a higher open. The Dow 30 futures pointed to a 0.16% rise, S&P 500 futures signaled a 0.05% uptick, while the Nasdaq 100 futures indicated a 0.15% gain.

Later in the day, the U.S. was to release reports on producer price inflation and industrial production.

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