- US economic growth revised upwards
- Eurozone and German consumer confidence rises
- S&P downgrades rating of EU
- UK GDP revised upwards
- UK consumer confidence falls
FTSE 100: 0.21%
CAC 40: 0.40%
FTSE MIB: 0.60%
IBEX 35: 0.16%
Stoxx 60: 0.52%
European stocks advanced as an upwards revision to economic growth estimates in the US confirmed the Federal Reserve was correct to reduce monetary stimulus.
US gross domestic product (GDP) rose by its fastest rate in two years during the third quarter, according to a revision of initial estimates by the Commerce Department. It said that the economy expanded by 4.1% in the three months to September, much higher than the previous figure showing 3.6% growth.
The upwardly revised data was due to a faster-than-expected increase in consumer spending and business investment during the quarter.
It comes after the Federal Reserve announced it would reduce its monthly bond purchases to $75bn from $85bn and would make further cuts gradually subject to economic data.
In the UK, GDP was up 0.8% in the July-to-September period compared with the previous quarter. It was in line with previous figures but growth in the earlier quarter was revised up. On a year-on-year basis, growth was 1.9%, revised up from an earlier estimate of 1.5%.
Also in the UK, GfK's consumer confidence index for the UK fell from -12 to -13 in December, surprising analysts who had expected a small up-tick to -11.
On a brighter note for European markets, GfK's forward-looking consumer sentiment indicator for Germany rose to 7.6 points in January from 7.4 points in December, the highest level since August 2007. Economists had expected it to remain unchanged.
Eurozone consumer confidence also improved in December, according to data from the European Commission.
Confidence in the 17 countries using the euro improved to -13.6 points from a dip to -15.4 in November. Economists had pencilled in a fall to -15. The data signalled that the nascent economic recovery in the Eurozone may be starting to positively affect household sentiment.
S&P downgrades EU
Standard & Poor's (S&P) stripped the European Union (EU) of its triple-A rating due to a decline in overall creditworthiness and decreasing cohesion amidst its 28 members.
The agency cut the region's credit rating to 'AA+' from the prior 'AAA' with a stable outlook.
"In our view, EU budgetary negotiations have become more contentious, signalling what we consider to be rising risks to the support of the EU from some member states," S&P said in the report.
BAE slumped after the defence company said yesterday that the United Arab Emirates ended talks to buy its Eurofighter Typhoon.
Cruise operator Carnival continued to advance as executives said yesterday both pricing and booking levels are returning to historical norms after being decimated by ship problems.
Retailers M&S, Tesco, Sainsbury and Morrison rebounded after a poor performance in recent days.
Telenet gained after Goldman Sachs raised its rating on the stock to 'buy' from 'neutral', citing growth prospects.
Lundin Petroleum retreated after Norway said the Swedish oil explorer drilled a dry well.
The euro rose 0.12% to $1.3677.
Brent crude futures climbed $0.952 to $111.350 per barrel, according to the ICE.