Europe midday: Eurozone GDP rise boosts sentiment

European shares were higher at midday on Friday as the never-ending deluge of corporate earnings continued with investors also cheered by better-than-expected economic growth in the eurozone.

The pan-European Stoxx 600 was up 0.94% in early deals, with all major bourses higher after data on Thursday showed the US economy shrank for a second straight quarter.

A swathe of European data showed that France managed to avoid recession after it returned to growth in the second quarter, with gross domestic product rising 0.5pc in the period after a 0.2% contraction at the start of the year.

Euro zone economic growth accelerated quarter-on-quarter in the second three months of the year, according to preliminary data released, defying expectations of a slowdown, due to stronger than forecast performances in Spain, France and Italy.

GDP in the single currency area rose 0.7% quarter-on-quarter from April to June and 4.0% year-on-year, said the European Union's statistics office Eurostat. Economists had been looking for a 0.2% quarterly rise and a 3.4% year-on-year gain.

In equity news, shares in luxury goods maker Hermes jumped as the company reported strong growth in Europe and the US, with a resurgence in in China in June.

Shares in Allfunds Group were up 11.4% after upbeat results and a deal to acquire a majority stake in Mainstreet Partners.

Britain’s NatWest Bank gained after reporting higher profits on the back of surging UK interest rates and also announced a £1.75bn return of cash to shareholders.

French bank BNP Paribas gained as it reported a better-than-expected profit in the second quarter after bad loan provisions dipped.

Reporting by Frank Prenesti at Sharecast.com