- Eurozone GDP grows
- Italy's Letta to step down
- UK construction rises
- Chinese inflation increases
FTSE 100: 0.02%
CAC 40: 0.56%
FTSE MIB: 1.31%
IBEX 35: 0.66%
Stoxx 600: 0.44%
European stocks gained as the Eurozone economy expanded more than expected in the fourth quarter.
Eurozone gross domestic product (GDP) grew 0.3% from the third quarter when it rose 0.1%, surprising analysts who had predicted a 0.2% increase.
The figures from Eurostat showed better-than-forecast growth in Germany and France helped drive the bloc's recovery in the quarter.
German GDP rose 0.4% from the third quarter when it increased by 0.3%, compared to estimates of 0.3%.
French GDP increased 0.3% after stagnating in the third quarter, exceeding the 0.2% consensus forecast.
"Economic growth figures for the final quarter of last year add to survey evidence that the Eurozone's recovery has moved up a gear," said Chris Williamson, Chief Economist at Markit.
"Not only has the pace of growth picked up to the fastest since the second quarter of 2011, but the recovery is also becoming more broad-based, encompassing core and so-called 'periphery' countries alike."
The improvement supports the European Central Bank's (ECB) decision to hold off on any further stimulus at its meeting last week. The ECB had come under pressure to take greater measures to tackle falling inflation.
In another lift to the bloc, Eurozone exports increased 4% to €148.8bn in December, while imports climbed 1% to €134.9bn.
UK construction, Chinese inflation
UK, construction output increased 2% in December in line with estimates, compared to a 4% fall in November, the Office for National Statistics (ONS) revealed.
Meanwhile, Chinese consumer prices rose by 2.5% year-on-year in January, matching the previous month's growth but exceeding the 2.4% forecast.
Later in the session will be the release of US industrial production data followed by the University of Michigan's consumer confidence report.
Italy's Letta to step down
Italian Prime Minister Enrico Letta has said he will resign today after his Democratic Party pushed for a new leader.
Party leader Matteo Renzi called for a change of government yesterday following a meeting with Letta.
Renzi, who has previously accused Letta of lack of action on improving the economy, is widely expected to take over the helm without an election.
ETX Capital Market Strategist, Ishaq Siddiqi, said financial markets are "so far are responding well to the news although if we hear of hiccups in the transition between leadership, things could change rapidly".
"In terms of any immediate changes, markets are not hopeful that a new government could suddenly implement an economic reform plan that could bear fruit in the near term but there are hopes that the fresh faced Renzi has the ability to turn things around."
ThyssenKrupp, Anglo American climb
ThyssenKrupp advanced after the German steelmaker posted third quarter profit that exceeded analysts' expectations.
Anglo American edged higher are reporting a rise in 2013 underlying operating profit as currency gains offset falling commodity prices.
Schindler Holding declined after the maker of elevators said annual profit fell 37% to 463m francs.
UBM slipped after Credit Suisse downgraded the media company to 'neutral' from 'outperform'.
Hikma Pharmaceuticals gained after the drugmaker raised its full-year revenue growth forecast.
The euro rose 0.11% to $1.3696.
Brent crude futures fell $0.194 to $108.310 per barrel, according to the ICE.