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London - Europe's stock markets rebounded on Wednesday on the back of bright economic growth data in China and upbeat comments from the Federal Reserve, dealers said.
In midday deals, London's FTSE 100 rallied 1.02% to 6 778.72 points, as data showed Britain's unemployment rate hit 6.5% in the three months to May - the lowest point since late 2008.
Frankfurt's benchmark DAX 30 index meanwhile won 1.37% to 9 852.19 points and the Paris CAC 40 jumped 1.46% to 4 367.97.
Milan stocks surged 2.13%, Madrid increased by 1.37%, and Lisbon was up 2.66%.
"European stock markets rose after upbeat comments on the US economy by Federal Reserve chairperson Janet Yellen and better-than-expected GDP figures out of China," said analyst Daniel Sugarman at trading firm ETX Capital.
US Federal Reserve head Janet Yellen indicated overnight that interest rates could rise earlier than expected if the jobs market continues to pick up.
"Yellen kicked off her testimony to US lawmakers, keeping a generally dovish tone but stressing that 'considerable uncertainty' over the outlook for the US economy would make it difficult to pinpoint the timing of future interest rate rises," Sugarman said.
Added to the picture, official data showed that China's powerhouse economy expanded by more than expected in the second quarter of this year.
China's National Bureau of Statistics said Wednesday the economy grew 7.5% in April-June, thanks largely to government stimulus measures aimed at tackling a slowdown in the world's second-largest economy.
The figure beat the 7.4% in the previous three months and exceeded the median forecast of 7.4% in a survey of 17 economists by AFP.
The strong data boosted the mining sector because China is a major consumer of metals.
In London, Rio Tinto shares gained 2.77% to 3 334.5 pence and Anglo American won 2.64% to 1 554 pence.
"More good news from China has engendered a strong bounce with miners leading the way," noted IG analyst Brenda Kelly.
In Paris, French steelmaking titan ArcelorMittal saw its share price soar 2.47% to €11.195, while Germany's heavy industry giant ThyssenKrupp gained 2.16% to €22.25 in Frankfurt.
However, the top winner in Paris was French power-to-rail group Alstom, boosted by a broker upgrade from Exane BNP Paribas.
Alstom's share price rallied 3.48% to €27.49.
In Lisbon, shares in crisis-hit Banco Espirito Santo, which had shed another 14.61% on Tuesday to a record low price of €0.38, rallied with a gain of 14.7% to €0.44 in mid morning trading.
This came as Portugal Telecom threatened legal action against a holding company in the bank for a debt of €847m which was unpaid by a deadline on Tuesday. However the holding company Rioforte is expected to seek protection from creditors.
Shares in Portugal Telecom, which had fallen by 36.7% since the end of June, rose by 7.10% to €1.96 after agreeing new, less favourable terms on a tie-up with Brazilian group Oi in view of the unpaid debt.
Asian equities were mixed on Wednesday, with investors seemingly unimpressed by the Chinese growth figures.
Shanghai stocks retreated by 0.15% and Tokyo dipped 0.10%, while Hong Kong added 0.27% and Sydney rose 0.14%.
"Generally speaking, China's economy showed good momentum of stable and moderate growth in the first half-year," said statistics bureau spokesperson Sheng Laiyun.
Beijing has introduced a series of policies since April to shore up growth, including tax breaks for small enterprises, infrastructure spending and the encouragement of lending in rural areas and to small companies.
The European single currency dipped to a one-month low at $1.3541, from $1.3570 late in New York on Tuesday.
The British pound eased to $1.7127 from $1.7142 on Tuesday. The euro slipped to 79.06 pence from 79.15 pence.
In commodity deals, gold declined to $1 298.20 per ounce from $1 310 on Tuesday.
