- Concerns reduced over economically-risky asset bubbles in US
- Italy heads to the polls
- Eurozone growth not expected until 2014
FTSE Mibtel 30: 1.40%
Ibex 35: 2.05%
Stoxx 600: 1.30%
European equities surged Friday as US Federal Reserve Chairman Ben Bernanke minimised concerns that the central bank's easy policy has created economically-risky asset bubbles.
In comments made at a closed meeting with Treasury Borrowing Advisory Committee in early February, Bernanke brushed off risks of asset bubbles in response to a presentation on the subject, according to reports.
He addressed concerns of rising farmland prices and the growth of mortgage real estate investment trusts.
Markets reacted positively to the news. They also responded well to economic data released Friday which showed Germany's business confidence surged to a 10-month high.
German growth in the last quarter of 2012 registered a 0.6 per cent contraction on-the-quarter, down from the previous quarter's 0.2 per cent growth.
Non-seasonally adjusted gross domestic product advanced 0.1% year-on-year, compared to the prior 0.4% increase. In annual work-day-adjusted figures, growth rose by 0.4%.
It was in line with expectations with Bundesbank which said it saw the German economy returning to growth this quarter.
Eurzone growth won't recover until 2014, says Brussels
The European Commission on Friday revised its growth forecast for the Eurozone, saying it does not see recovery until 2014.
The Commission had previously said the European Union would grow this year.
Its latest statement suggested Europe's economy would shrink 0.3% this year after a 0.6% fall in 2012 as a result of unemployment rates and a lack of bank lending.
The new forecast also said Spain and France will miss debt-cutting targets as the countries struggle against difficult economic conditions.
"The ongoing rebalancing of the European economy is continuing to weigh on growth in the short term," EU Economic and Monetary Affairs Commissioner Olli Rehn said.
He said the Eurozone will need to keep up on reforms before seeing a return to growth.
Italy prepares for election
As Italy prepares to head to the polls Sunday, analysts have labelled the presidential election as a significant risk event.
Former Prime Minister Silvio Berlusconi has gained voter support in recent weeks through his popular policies but some say it could spell trouble for the euro and the financial markets if he returns to the helm.
However, centre-left coalition leader Pier Luigi Bersani has taken the lead according to the latest polls.
Bersani is expected to follow the lines of fiscal tightening imposed by Prime Minister Mario Monti, either with a majority win or in a coalition with Monti.
Analysts at Schroders see a Bersani victory to be likely: "We expect Bersani to become the next PM of Italy, and will probably have to join forces with Monti's coalition to take the upper house. This result should help boost the confidence of investors in Italy's ability to continue along its much needed reforms strategy. Even if the election does not go as smoothly as planned, our view is that volatility in both Italian bond and equity markets represent a buying opportunity."
Millennium & Copthorne shares
drop as revenues fall
Elan Corp. advanced as the drugmaker announced plans to buy back $1.0bn after selling its stake in the Tysabri multiple-sclerosis drug to Biogen Idec Inc.
Valeo jumped after the French car-parts maker said earnings before interest, taxes and one-time changes increased to €725m in 2012 from €704m, beating analysts expectations.
UK security provider G4S fell after HSBC Holdings cut its rating on the stock to underweight, similar to a sell recommendation, from neutral.
Millennium & Copthorne fell after it said full-year revenues declined 6.4% to £768.3m.
Other asset classes mixed
The euro/dollar plunged 0.17% to the 1.3167 dollar
Front month Brent crude futures rose 0.325 dollars to the 113.900 dollar per barrel mark on the ICE.