European Shares Rise on China Growth Data

By Clare Connaghan 

Shares rose in early trading in Europe on Wednesday after stronger-than-expected growth data out of China offset market jitters over an escalation of tensions between Ukraine and Russia.

The benchmark Stoxx Europe 600 index rose 0.7%, while Germany's DAX added 0.7%, France's CAC-40 was 0.8% higher and the U.K. FTSE 100 index was up 0.5%.

The early gains follow data showing Asia's largest economy grew 7.4% in the January-to-March period compared with a year earlier, a touch higher than expectations of 7.3%, but below growth of 7.7% in the final quarter of last year.

"The reported economic slowdown in China in the first quarter wasn't as sharp as some had feared," said Lee Hardman, a currency analyst at Bank of Tokyo-Mitsubishi in London.

The China GDP news helped investors to brush aside developments in Ukraine, where the military fired its first shots Tuesday in the fight to regain control of the restive east of the country from pro-Russian separatists.

The Russian ruble was slightly stronger Wednesday despite the developments, while the RTS index was up almost 0.2% in early trade.

Ukraine's currency, the hryvnia, continued to gain ground, after Monday's three-percentage-point rate rise by the country's central bank. Most recently, the hryvnia was quoted at 11.75 against the dollar, up almost 10% from its record low on Monday.

In commodities markets, gold was off 0.1% at $1,301.70 a troy ounce, and Brent crude oil was 0.1% higher at $109.50 a barrel.

In corporate news, shares in Credit Suisse Group AG fell after the Swiss bank delivered a disappointing profit figure for the first quarter of 859 million Swiss francs ($975.47 million), down from the 1.3 billion francs for the year-earlier period.

Tesco PLC shares rose despite the U.K. retailer posting its second consecutive fall in full-year profit. For the year to Feb. 22, Tesco's trading profit--which excludes property gains or losses--fell to GBP3.31 billion ($5.54 billion) from GBP3.45 billion a year earlier, on sales that were largely flat at GBP70.89 billion

Looking ahead, U.K. monthly unemployment figures are due at 0830 GMT, while euro-zone consumer price inflation data will be released at 0900 GMT.

In the U.S., a speech from Federal Reserve Chairwoman Janet Yellen at the Economic Club of New York at 1625 GMT will be watched for clues on the outlook for U.S. monetary policy.

Write to Clare Connaghan at [e-mail]