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Europe closes up on China; Espirito Santo sours

European shares extended gains to close higher on Wednesday, as investors reacted to fresh growth data from China.

China data boosts miners

The pan-European FTSEurofirst300 provisionally closed 1.3 percent higher at 1,375.58 points. It rose by over 1 percent in the morning, and continued to inch up after Wall Street opened higher.

The U.K. benchmark FTSE 100 closed unofficially higher by 1.1 percent. the German Dax and French Cac indexes ended provisionally higher by respectively 1.4 percent and 1.5 percent.

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
---
DAX
---
CAC 40
---
IBEX 35
---

Across Europe, the basic resources sector saw heavy buying, after strong data from China buoyed those stocks that are heavily exposed to the country.

Data overnight showed China's economy grew 7.5 percent in the second quarter, above estimates for a 7.4 percent increase.

Other data from China showed June industrial output rose at a stronger-than-expected 9.2 percent and retail sales increased at an annualized 9 percent.

Read MoreChina economy grows 7.5% in the second quarter

Back in Europe, data from the U.K. showed unemployment there had fallen to the lowest level since late 2008.

Yellen speaks again

U.S. markets opened up on Wednesday in a flurry of deal activity, after Rupert Murdoch's 21st Century Fox made a surprise $80 billion offer for Time Warner.

Read MoreMurdoch fires 'first salvo' in media mergers

Janet Yellen continues her two-day testimony in front of U.S. lawmakers on Wednesday. On Tuesday, the central banker remained relatively dovish but expressed concerns about stretched valuations in equity markets, including the social media and biotech sectors.

Banco Espirito Santo surges

Shares of Portugal's troubled Banco Espirito Santo surged to close over 18 percent higher, after a ban on short-selling its stock was extended. This followed the record-lows hit on Tuesday,

Read MorePortugal's bank woes just got more complicated

Also on the Lisbon stock exchange, shares of Portugal Telecom closed nearly 3.3 percent higher after it rushed to salvage a possible tie-up with Oi, the Brazilian telecoms company.

Boosted by Espirito Santo and Portugal Telecom, the PSI 20 outperformed, closing provisionally higher by 2.9 percent.

In the U.K., shares of U.K.-listed miner Rio Tinto closed around 2.8 percent higher after its announced it was increasing iron ore output and stepping up shipments to China.

Meanwhile, shares of Italy's GTECH ended over 4 percent higher after the announcement that it would buy International Game Technology in a deal valued at $6.4 billion.

Read MoreItaly's GTECH to buy gaming company IGT for $6.4B

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