Europe close: Stocks rally on positive German data

European stocks rallied after German data on unemployment and consumer confidence beat forecasts.

German unemployment fell 20,000 in February, more than the 10,000 decline that was expected, leaving the jobless rate steady at 6.5% in February.

Another report showed German confidence increased more than forecast in March. GfK’s forward-looking sentiment index climbed to 9.7 this month from 9.3 in February, beating analysts’ estimates of 9.5.

Meanwhile, a clear majority of MPs from German Chancellor Angela Merkel's centre-right bloc has backed a four-month extension of Greece’s bailout.

Ahead of a full vote on Friday, a test ballot showed 311 MPs from the CDU/CSU voted in favour with 22 voting against.
The euro fell 1.32% to $1.1211.

In the UK, gross domestic product was confirmed at 0.5% growth in the fourth quarter of 2014, in line with the preliminary reading and economists' expectations.

The data showed the UK grew 2.7% on an annual basis, up from a prior reading of 2.6%, indicating no change from the earlier estimates. However, the figures denote a downward trend as the UK economy grew at 0.8% on a quarterly basis in the second quarter of 2014 and 0.7% in third quarter.

In the US, inflation data revealed the discouraging effect of weakening oil prices on the overall level of consumer prices.
Core consumer prices, which strip out food and energy, rose 0.2% month-on-month and 1.6% year-on-year, in-line with economists’ estimates.

The headline consumer price index (CPI) however fell by 0.7% month-on-month after a revised fall of 0.3% in December.
Economists stressed that while the US had slipped into deflation, the Federal Reserve remained unlikely to change its policy.

US initial weekly unemployment claims unexpectedly jumped by 31,000 to reach 313,000 over the seven days ending on 21 February, according to the US Department of Labor.

Orders for durable goods in the US rose by 2.8% on the month in January, coming in well ahead of the 1.7% rise which had been expected.

InBev, Bayer

Anheuser-Busch InBev NV gained after announcing plans to buy back $1 billion of shares.

Bayer jumped after it forecast an increase in 2015 sales.

Solvay SA edged higher after reporting quarterly net income that beat analysts’ estimates.

Royal Bank of Scotland Group slumped after saying restructuring would lead to “substantial” job losses and reporting a net annual loss in 2014 following the write down of its US division.

GDF Suez climbed after posting full-year net income in line with estimates and saying it will reduce capital expenditure.

Cie. de Saint-Gobain SA dropped as the European supplier of building materials reported annual net income that fell short of consensus forecasts.

Brent crude fell 1.1% to $60.95 per barrel at end of trading, according to the ICE.