Europe close: Shares close higher despite weak UK GDP

The pan-European Stoxx 600 index was 0.4% higher at 465.49. Sentiment was tempered by the debt ceiling row in the US, where Congress is trying to find a compromise on the limit — the maximum amount of money that the two chambers allow the federal government to borrow.

Democratic leaders want the limit to be raised, but Republican lawmakers have called for spending cuts to be agreed before anything is approved. Treasury Secretary Janet Yellen warned earlier this month that without a deal, the largest economy in the world could risk default by June 1.

In UK economic news, GDP fell 0.3% in March, worse than expected, with most analysts looking for no growth.

However, March’s figure followed 0.0% in February but growth of 0.5% in January, revised upwards from a previous print of 0.4%. As a result, GDP was estimated to have edged higher over the first quarter by 0.1%.

"While the surprise change in the UK’s economic growth is certainly welcome, there are still real hurdles to overcome. There’s no sugar coating the fact that growth remains very sluggish – the UK is hardly on course to shoot the lights out this year," said Hargreaves Lansdown analyst Sophie Lund-Yates.

"The main issue is that inflation is set to fall more slowly than expected, partly because of the unprecedented rise in supermarket prices. It’s now thought that inflation will stay above its 2% target until 2025, a full nine months longer than initially forecast."

In equity news, THG slumped 10% as called off take-over talks with US private equity outfit Apollo Global Management.

Like previous offers for THG, Apollo's bid was said to have been rejected due to an "inadequate valuation" and the nature of the offer structure.

"THG's Board, in accordance with its fiduciary obligations and as demonstrated with its recent engagement with Apollo, will always give due consideration to all potential options which provide the opportunity to maximise value to THG's shareholders," THG chair, Charles Allen said.

Luxury goods specialist Richemont gained as it reported a surge in annual sales and profits on Friday, as demand in China bounced back.

The Swiss owner of Van Cleef & Arpels, Montblanc, Chloe and Cartier, among others, said sales in the year to 31 March jumped 19% at actual exchange rates, to €19.95bn, a record high, while operating profits surged 34% to €5.03bn.

France’s Societe Generale gained afterbeat first-quarter earnings estimates, though shares were slightly lower in early trade.

Shares in Germany’s Allianz fell as the insurer missed expectations but posted a 329% profit increase after last year’s results were affected by fines and a settlement over one of its US funds.

Scor shares soared as the French insurer reported strong first-quarter profits.

Reporting by Frank Prenesti for Sharecast.com