Following sell-off, European stocks advance on solid growth

AP News
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Posted: May 13, 2015 8:03 AM
Following sell-off, European stocks advance on solid growth

LONDON (AP) — A day after a bond market-related sell-off, European stocks rebounded Wednesday after figures showed the 19-country eurozone growing at its fastest tick in nearly two years. Chinese stocks, though, failed to track other markets following weak April retail spending.

KEEPING SCORE: In Europe, France's CAC 40 advanced 0.9 percent to 5,021 while Germany's DAX added 0.4 percent to 11,521. Britain's FTSE 100 rose 0.3 percent to 6,957. Wall Street was poised for modest gains at the open too with Dow futures and the broader S&P 500 futures up 0.2 percent.

EUROZONE ON UP: The economy of the 19 countries that use the euro grew by a quarterly rate of 0.4 percent in the first three months ahead, Eurostat, the European Union's statistical agency, said. That was up from the 0.3 percent recorded in the previous three-month period and was in line with most expectations in the financial markets. Growth hasn't been this strong since the second quarter of 2013, when it also stood at 0.4 percent in the wake of the region's longest-ever recession. The eurozone also grew far faster than the U.S., which saw output expand at a paltry quarterly rate of 0.1 percent largely because of bad weather.

ANALYST TAKE: "This is encouraging when you consider that the eurozone economy has ground to a halt in recent years," said Craig Erlam, senior market analyst at OANDA.

US DATA: U.S. retail sales figures for April are set to set the market tone on Wall Street later. The consensus in the markets is that they grew by about 0.2 percent increase, providing further evidence that the world's largest economy has come off the boil. "A weak number here could well weaken the dollar further, and raise further questions about the U.S. economic recovery," cautioned Michael Hewson, chief market analyst at CMC Markets.

CHINA COOLING: Earlier, weak Chinese figures added to signs the downturn in the world's second-largest economy is deepening. Retail sales growth slowed to 10 percent, dragged down by weaker real estate-related sales of home appliances, furniture and construction materials. The Shanghai Composite Index ended 0.6 percent lower at 4,375.76 while Hong Kong's Hang Seng shed 0.6 percent to 27,249.28.

ASIA'S DAY: Elsewhere in Asia, the mood was far more buoyant, with Japan's Nikkei 225 closing up 0.7 percent at 19,764.72 and South Korea's Kospi gaining 0.8 percent to 2,114.16. Sydney's S&P ASX 200 advanced 0.7 percent to 5,715.10.

ENERGY: Benchmark U.S. crude added 58 cents to $61.33 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, advanced 52 cents to $67.38.

CURRENCY: The euro rose 0.2 percent to $1.1241 while the dollar fell 0.1 percent to 119.72 yen.