LONDON - European equities rose in thin holiday trade Tuesday as dealers ignored sharp falls in Asia to focus on stellar US growth figures, while the euro slumped to a new 2-year low against the dollar.
London's FTSE 100 index of top shares rose 0.34 percent compared with Monday's close to stand at 6,598.97 points in afternoon trade.
Frankfurt's DAX 30 index climbed 0.46 percent to 9,911.02 points and the Paris CAC 40 jumped 1.19 percent to 4,305.09.
Early in the day European investors were cheered by US stock indices having hit new records on Monday as the markets still reacted to a likely reprieve from US interest rate hikes until mid-2015.
Then in the afternoon data showing that US growth surged to its highest level in 11 years in the third quarter helped bolster trading.
Gross domestic product (GDP) increased five percent between July and September in the Commerce Department's third estimate for the period, up from the 3.9 percent previously estimated.
Analysts had expected growth of 4.3 percent.
- Dow shoots above 18,000 -
That propelled the Dow Jones Industrial Average above the 18,000 level for the first time when Wall Street opened, rising 0.27 percent to 18,008.57 points.
The S&P 500 gained 0.30 percent to 2,084.80, while the tech-rich Nasdaq Composite Index added 0.22 percent to 4,791.90.
"US markets look set to continue to make new record highs after today's Q3 GDP revision to an annualised 5 percent, the best performance since 2003, helped by increases in personal consumption and increased investment," said CMC Markets analyst Michael Hewson.
However he noted that the strong growth figures might lead to a return of concerns the US Federal Reserve will raise interest rates early in 2015, which had sent markets tumbling earlier this month.
"What this data does do is raise expectations that the Fed might find it much more difficult to resist calls for tighter policy as we head into 2015 irrespective of the deflationary effects of the recent falls in the oil price," said Hewson.
Surging US growth also pushed the dollar higher, with the euro slumping to a new 2-year low of $1.2183.
The euro later stood at $1.2191, down from $1.2226 late on Monday.
In Tuesday deals on the London Bullion Market, gold fell to $1,179.50 per ounce from $1,195.25 on Monday.
Trading was thin in Europe on Tuesday with many investors away for an extended festive break for Christmas and New Year holidays.
The Frankfurt stock market closes for Christmas at the end of trade today, while London and Paris will shut down at lunchtime on Wednesday. All three markets reopen for business on Monday.
- Asian stocks slump -
In Asia equity trading China led a slump on Tuesday, with Shanghai registering one of its biggest percentage falls of the year and banks among the biggest losers there.
Dealers said a recent run-up following a surprise Chinese interest rate cut had created room for a market correction.
Shanghai dived 3.03 percent and the Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.39 percent.
Hong Kong ended down 0.32 percent, Sydney dropped 61.1 points and Seoul slipped 0.21 percent. Tokyo was closed for a public holiday.
"The (Shanghai) market climbed too fast in such a short time after the November interest rate cut, which has caused some structural problems in the market," Shenyin & Wanguo Securities analyst Gui Haoming told AFP.
The market had jumped more than 20 percent since the cut to interest rates last month -- rising above the 3,000 mark on December 16 for the first time in three and a half years.
Industrial and Commercial Bank of China lost 4.88 percent to 4.48 yuan while China Construction Bank fell 5.01 percent to 6.26 yuan.
AFP
