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Europe shares close higher; Italy leads the charge

European stocks closed higher on Friday with sentiment boosted by better-than-expected growth data from the euro zone, while Italian shares reacted positively to the prospect of a new prime minister.

Euro zone GDP beats

The pan-European FTSEurofirst 300 Index provisionally closed higher by 0.5 percent at 1,331.59 points.

Data released mid-morning showed the euro zone economy grew faster than expected in the fourth quarter of 2013. Official figures published by Europe's statistics agency, Eurostat, revealed the economy had expanded by 0.3 percent compared with the previous quarter, above analyst forecasts of 0.2 percent.

This came after early-morning figures showed the German and French economies grew at a similar pace in the final quarter of 2013, bridging the gap seen in recent quarters between the euro zone's two largest economies, as investment picked up in both regions.

France's economy grew 0.3 percent in the final quarter of 2013, slightly more than the 0.2 percent analysts had expected, after seeing no growth in the third quarter. Germany, meanwhile, grew 0.4 percent in the quarter, a faster growth rate than the 0.3 percent growth consensus.

(Read More: Euro zone growth surpasses expectations)

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
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DAX
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CAC 40
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IBEX 35
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Italy PM resigns

In Italy, Prime Minister Enrico Letta tendered his resignation on Friday after his Democratic Party withdrew support for him at a leadership meeting. Florence's Mayor, Matteo Renzi — who has been touted as his replacement — said on Thursday that it was time for "radical change" in the economically stagnant country.

Shares on the Italian FSTE MIB Index initially cheered the news, provisionally closing up 1.7 percent.

(Read More: 'Demolition Man' Renzi's next fight: Berlusconi)

In the U.S., stocks erased their early losses in volatile trading Friday, with the S&P 500 on track to post its first two-week winning streak of the year, as investors digested a batch of economic data.

In Asia, shares were mixed on Friday with Japan's benchmark index falling to a one-week low while the rest of the region gained following higher-than-expected Chinese inflation data. Chinese consumer inflation rose an annual 2.5 percent last month, remaining at a seven-month low.

(Read More: China's inflation stays subdued in January)

In corporate earnings, the U.K.'s Anglo American posted a forecast-beating increase in 2013 operating profit on Friday but shares closed the day down by around 0.9 percent.

Germany's Thyssenkrupp announced better-than-expected results on Friday buoyed by an improvement at its Brazilian unit; shares closed higher by roughly 3.8 percent.

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