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Asian, European stocks rise on US stimulus hopes

written by Bella Palmer
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London stocks added 0.3 percent, Frankfurt gained 0.6 percent and Paris added 0.7 percent

Asian and European stocks climbed Friday as mostly bright economic data and US stimulus hopes eclipsed long-running inflation fears, dealers said.

London stocks added 0.3 percent at midday, with traders welcoming another forecast-beating reading on US jobless claims that reinforced hopes about the recovery in the world's top economy.

Elsewhere, Frankfurt gained 0.6 percent and Paris added 0.7 percent, as upbeat eurozone survey data topped news of another contraction in the French economy.

The euro steadied versus the dollar while oil prices jumped on signs of strengthening US crude demand.

Rising eurozone economic sentiment and the prospect of further stimulus in the US have boosted the mood in the markets on Friday, said OANDA analyst Sophie Griffiths. Eurozone economic sentiment suggests that regional recovery is ready to take off.

The European Commission's (EC) key eurozone sentiment indicator surged to 114.5 in May.

That was markedly above its pre-pandemic level, according to the data release, and compared with 110.5 in April.

The headline surveys in the eurozone continue to signal barnstorming growth midway through Q2 as the economy gradually reopens, and vaccination continues apace, added Pantheon Macroeconomics analyst Claus Vistesen.

However, separate figures also showed Friday that the French economy contracted by 0.1 percent in Q1, confounding predictions of 0.4 percent growth.

That extended France's lengthy recession which was sparked last year by the pandemic and ensuing lockdown restrictions.

Yet commentators remain optimistic over the nation's overall outlook.

We still expect the gradual reopening of the French economy to lead to a strong rebound in activity, IHS Markit analyst Diego Iscaro told AFP.

He said: Given the timing of the reopening, it is likely that the rebound will be reflected in the third quarter of the year and will be driven by a surge in private consumption.

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