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London - European shares rose on Wednesday to fresh 5½ year highs, led by stocks sensitive to the global economic outlook after the World Bank raised its growth forecast for the first time in three years.
So-called "cyclical" stocks such as financials, energy and consumer discretionary stocks combined to add 5 points to the pan-European FTSEurofirst 300, accounting for the majority of the index's advance to 1 332.96 points - a gain of 0.5%.
The index rose to levels not seen since the middle of 2008, and Germany's DAX hit new all-time highs.
Equities
The gains came after the World Bank said the global economy had come to a "turning point," with fiscal austerity and policy uncertainty no longer weighing as heavily on most richer economies. It predicted total global growth of 3.2% in 2014.
Concerns over growth, especially in the United States, had dragged on equities following a sharp miss in US jobs data late last week.
But stocks pared sharp losses on Tuesday, helped by signs of life in the US economy as forecast-beating December retail sales data showed it gathering steam at the end of last year and poised for stronger growth in 2014.
Retail avenue
"We've had a bit of consolidation, but after Wall Street's rally on Tuesday, and with global growth looking alright, the outlook for equities looks quite good," said Zeg Choudhry, head of trading at Northland Capital.
"The focus will be on earnings from now and people expect them to be OK as expectations are quite low."
Earnings fuelled Europe's top gainer. Burberry posted a 14% rise in underlying retail revenue in the Christmas quarter and saw its stock trade 6.5% higher.
The update was seen as boding well for the consumer discretionary sector at large, after a festive trading period which has proved mixed for high street retailers and supermarkets.
So-called "cyclical" stocks such as financials, energy and consumer discretionary stocks combined to add 5 points to the pan-European FTSEurofirst 300, accounting for the majority of the index's advance to 1 332.96 points - a gain of 0.5%.
The index rose to levels not seen since the middle of 2008, and Germany's DAX hit new all-time highs.
Equities
The gains came after the World Bank said the global economy had come to a "turning point," with fiscal austerity and policy uncertainty no longer weighing as heavily on most richer economies. It predicted total global growth of 3.2% in 2014.
Concerns over growth, especially in the United States, had dragged on equities following a sharp miss in US jobs data late last week.
But stocks pared sharp losses on Tuesday, helped by signs of life in the US economy as forecast-beating December retail sales data showed it gathering steam at the end of last year and poised for stronger growth in 2014.
Retail avenue
"We've had a bit of consolidation, but after Wall Street's rally on Tuesday, and with global growth looking alright, the outlook for equities looks quite good," said Zeg Choudhry, head of trading at Northland Capital.
"The focus will be on earnings from now and people expect them to be OK as expectations are quite low."
Earnings fuelled Europe's top gainer. Burberry posted a 14% rise in underlying retail revenue in the Christmas quarter and saw its stock trade 6.5% higher.
The update was seen as boding well for the consumer discretionary sector at large, after a festive trading period which has proved mixed for high street retailers and supermarkets.
