- China GDP expands
- UK unemployment falls
- Yellen due to speak
FTSE 100: 0.96%
CAC 40: 1.46%
FTSE MIB: 2.03%
IBEX 35: 1.40%
Stoxx 600: 1.17%
European stocks rallied after data showed China's economy grew more than expected and the number of UK jobless declined.
Gross domestic product in China rose 7.5% in the three months to June from a year earlier, beating the forecast for a 7.4% increase. It meets the government's growth target, signalling that stimulus measures are supporting economy.
"Today's Chinese data has been a real boost for investors who have been looking for any reason to buy the dips recently," said Craig Erlam, analyst at Alpari UK.
"Given the concerns about Chinese growth earlier this year, it is a big relief to see the country growing at 7.5% in the second quarter, even if this is largely due to the targeted stimulus efforts of the government and central bank. As long as this continues, investors will be happy."
In the UK, the unemployment rate fell to 6.5% in the three months to May from 6.6% the previous quarter, a near five-and-a-half low. Jobless claims dropped 36,300 in June, after a 32,800 a decline a month earlier. Economists had predicted a decrease of 27,000.
However, regular pay rose just 0.7% on a year ago in the three months to May, down from 0.9% in the three months to April.
"Irrespective of the doubts over the data, until pay growth starts to pick up, the Bank of England will be reluctant to raise interest rates for fear that households will be unable to withstand the higher mortgage costs," said Chris Williamson, Chief Economist at Markit.
Later on, the US will see the release of manufacturing and industrial production figures and Federal Reserve Chair Janet Yellen's testimony to the House Committee.
Yellen spoke to the Senate Banking Committee yesterday when she signalled that interest rates will remain low for some time since the US economic recovery is "not yet complete" and too many Americans remain unemployed.
Meanwhile, European Union leaders are meeting in Brussels today and will discuss increasing the scope of sanctions against Russia over its involvement in the Ukraine turmoil.
Casino Guichard-Perrachon rises
Casino Guichard-Perrachon jumped as the Saint-Etienne-based retailer reported second-quarter sales that surpassed analysts' estimates.
Rio Tinto Group advanced as the mining company said second-quarter iron-ore production rose 11%.
ASML Holding declined as the European supplier of semiconductor equipment forecast full-year sales that fell short of market expectations.
Banco Espirito Santo gained on reports that one of the lender's holding companies plans to file for protection from creditors in Luxembourg.
Gtech SpA edged higher after agreeing to buy International Game Technology for $4.7bn.
The euro fell 0.22% to $1.3538.
Brent crude futures rose 0.169% to $106.20 per barrel, according to the ICE.