European stock markets rallied on Friday after the United States and Britain showed stronger-than-expected growth in the fourth quarter.
London's FTSE 100 index gained 1.45 per cent after revised official data showed that Britain emerged from the longest recession on record in the last quarter of 2009 in better shape than previously thought.
In Paris, the CAC 40 was up 1.87 per cent while Frankfurt's DAX rose 1.20 per cent. The DJ Euro Stoxx 50 index of top eurozone shares increased by 1.64 per cent.
European stock markets had started off the day higher on the heels of an impressive overnight clawback on Wall Street.
"European indices all received a boost from last night's late turnaround on Wall Street," said GFT analyst David Morrison.
In New York on Thursday, Wall Street's Dow Jones Industrial Average recovered from sharp losses to end down by just 0.51 per cent, after an earlier plunge of more than 185 points.
Markets were hit this week by poor US data -- rising weekly claims for jobless insurance benefits, plunging consumer confidence and more evidence of a sluggish housing market.
In Britain, the Office for National Statistics said gross domestic product -- the value of all the goods and services produced in the economy -- grew by 0.3 per cent in the fourth quarter.
That was stronger than the previous estimate of 0.1 per cent expansion, and beat market expectations of 0.2 per cent growth in the final three months of 2009, after six successive quarters of contraction.
"This upwards revision is an encouraging sign that the economy has been growing stronger, and for longer, than the official data suggest," said economist Neville Hill at Credit Suisse.
But investors were still closely watching the situation in Greece amid concerns about its debt hurting the eurozone.
Greek Prime Minister George Papandreou warned that the country risks bankruptcy unless strict austerity measures are enacted fast to cut its deficit.
And reports said Athens had to delay a bond issue this week because of financial market turbulence.
"Depending on the day -- and sometimes the hour -- the global economic recovery story is either intact or it is coming undone," said Patrick O'Hare at Briefing.com.
"Greece is either going to succeed with its fiscal austerity measures or it is not ... The disparate views are the basis for a market that can't seem to make up its mind where it wants to go. That indecision, in turn, has manifested itself in some choppy trading activity."
Elsewhere in Europe, Milan's FTSE Mib closed 1.08 per cent higher, the Amsterdam stock market was up 0.92 per cent and the Swiss stock exchange rose 1.01 per cent.
On the downside in London, Lloyds Banking Group shares sank 4.37 per cent to 52.50 pence.
The state-rescued firm reported a loss of STG6.3 billion ($A10.83 billion) last year, as bad debts ballooned after the purchase of rival group HBOS in January 2009.
AFP
