European shares buoyed by growing faith in US economy

European shares rose in early deals on Wednesday, benefitting from increased optimism over the global economy after stronger US data helped allay fears about the pace of recovery there.

The pan-European FTSEurofirst 300 gained 0.2 per cent to 1,313.54 points at 0803 GMT, led by insurer Legal & General, up 2.1 per cent after a contract win.

Stock markets in Europe broadly tracked gains made in Asian and US trade, where buoyant US consumer confidence and house prices helped to fuel gains.

The two reports were the latest in a series of positive data releases from the United States, supporting the view that bad weather rather than inherent economic weakness affected weaker reports earlier this year.

"Concerns around the three C's (cold, Crimea, China) are dropping off as the effect of the US winter subsides, the Crimean conflict is no longer affecting markets and China has seen stimulation bets ramping up," Evan Lucas, market strategist at IG, said.

“This will mean markets will continue to push higher in the short term, with the US and China currently driving most market reactions; and signs of stability or growth will be equity and commodity supportive.”

Growing bets that China will act to stimulate its economy and an increased resilience to uncertainty over relations between Russia and the West over Crimea helped to support European equity markets on Tuesday.

The FTSEurofirst 300 rose 1.3 percent in the previous session, bouncing off a one-week closing low set at the start of the week.

Reuters