German data lifts gloom, ECB funds eyed
By Richard Hubbard

LONDON (Reuters) – European shares and the euro rose on Tuesday on surprisingly good news about the German economy and a better-than-expected outcome at a Spanish treasury bill auction, but concerns about the euro zone debt crisis limited gains.

The Munich-based Ifo think-tank said German business sentiment rose sharply in December, defying expectations it would decline and underscoring the resilience of Europe’s biggest economy.

“The business climate in retailing and domestic construction has improved, said Klaus Abberger, the survey’s coordinator.

“At the moment I don’t think we (Germany) will fall into recession again.”

The euro was up about 0.6 percent to $1.3080 and away from Monday’s low of around $1.2983. The single currency hit an 11-month low of $1.2944 last week.

“Sentiment remains fragile towards the euro,” said Simon Derrick, head of currency research at Bank of New York Mellon.

“You just need another piece of bad news and the euro will be nudging closer to its 2011 lows,” he said.

The FTSEurofirst 300 (:.FTEU3) index of top European shares was up 0.5 percent at 962.14 points in choppy trade, following a 4.3 percent slide over the past two weeks. The euro zone’s blue chip Euro STOXX 50 (Zurich:^STOXX50E – News) index was up 0.8 percent at 2,221.36 points, following a near 9 percent drop in two weeks.

However, the MSCI world equity index (:.MIWD00000PUS) was around 0.25 percent higher after starting flat. For more visit: Yahoo finance

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