Europe shares close higher on strong China data
European shares closed higher on Thursday following better-than-expected trade numbers from China, signaling tentative signs of an economic recovery.
The pan-European FTSEurofirst 300 Index provisionally closed up 0.2 percent at 1,220.47 points.
European stocks bounced back after Wednesday's weakness which followed the Bank of England's quarterly inflation report in which governor Mark Carney outlined his plans to link the outlook for interest rates to unemployment.
(Read more: BoE's Carney fails to impress with 'Fed 2.0')
Chinese exports rose 5.1 percent in July, compared to a Reuters forecast of a 3 percent rise, and much better than the 3.1 percent fall in June. The data from the world's biggest metals consumer gave a boost to mining stocks.
Meanwhile, imports jumped 10.9 percent in the month, versus expectations of a 2.1 percent rise and following the 0.7 percent drop in June, raising hopes the world's second largest economy may be stabilizing.
"All this confirms our view that the economy has bottomed out and will re-accelerate in the second half. We'd like to call the end to worries over China for this year," Dariusz Kowalczyk, senior economist and strategist of Asia ex-Japan at Credit Agricole told CNBC.
(Read more: China's trade data surge past expectations)
In the U.S., stocks flirted with the flatline in choppy trading, with the Dow headed for its first four-day losing streak this year, despite the data from China and following the weekly jobless claims report.
The former — Germany's second largest lender — saw earnings drop in the second quarter, due to the slowing European economy. The bank's net profit of 43 million euros was short of the average forecast of 65 million euros. The figures were, however, broadly in line with expectations and investors shrugged off concerns; the stock provisionally closed 15.65 percent higher.
British insurer Aviva also rallied, up roughly 7.2 percent, after announcing a larger-than-expected rise in operating profit, vindicating a group-wide shake-up after a shareholder revolt last year.
Rio Tinto reported an 18 percent drop in first-half underlying earnings, hit by weaker iron ore, copper and coal prices. The stock nevertheless moved 0.77 percent higher as the trada data from China outweighed news that underlying earnings fell to $4.23 billion in the six months to June from $5.15 billion a year earlier. The group also signaled it had given up hope of ditching its Pacific Aluminium business.
(Read more: Rio Tinto to hang on to loss-making aluminium arm)
In other stock news, Germany's second largest lender, Commerzbank, saw earnings drop in the second quarter as it suffered from a slowing European economy. The bank's net profit of 43 million euros was short of the average forecast of 65 million euros. The numbers were, however, broadly in line with expectations and investors shrugged off concerns.
Deutsche Telekom closed around 7.7 percent higher after the firm said full-year earnings will decline slightly due to expenses for the addition of at least one million new customers at T-Mobile U.S.
(Read more: T-Mobile owner hails 'massive' US turnaround)
On the downside, underlying sales at Nestle grew 4.1 percent in the first half, missing forecasts and lagging growth of rivals Danone and Unilever, as price erosion continued in Europe, prompting the world's biggest food group to cut its sales goal. The share closed 2.16 percent lower after the numbers.
Fund manager Schroders closed down around 5.3 percent after bigger-than-expected outflows in June.
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