French market leads European shares near 2-1/2 month highs

Wed Aug 14, 2013 10:28am EDT

* FTSEurofirst 300 up 0.3 pct, near 2-1/2 month highs

* France's CAC-40 outperforms other major European markets

* Economic recovery buoys European stock markets

By Sudip Kar-Gupta

LONDON, Aug 14 (Reuters) - European shares rose back towards 2-1/2 month highs on Wednesday, led by gains on the French stock exchange, as data showing that the euro zone had emerged from recession lifted the region's markets.

The pan-European FTSEurofirst 300 index was up by 0.3 percent at 1,241.25 points in late session trade, putting the index at its highest level since late May.

The euro zone's blue-chip Euro STOXX 50 index also advanced by 0.3 percent to 2,850.10 points while France's CAC-40 index outperformed other major European markets with a 0.6 percent rise that put the CAC at a 2-year high.

Traders said European stock markets had been boosted by data on Wednesday which showed that the economies of Germany and France - the euro zone's two powerhouses - had grown faster than expected in the second quarter.

"French GDP (gross domestic product) was better than expected, and there is some talk of global money arriving in Europe as Europe claws its way out of recession," said Rupert Baker, a European equity sales executive at Mirabaud.

Cyrille Urfer, head of asset allocation at Swiss bank Gonet, said he was sticking to an 'overweight' position on Europe equities and would look to cash in profits on the U.S equity market rally rather than the European one.

Despite this year's global equity rally, European equity markets are still lagging the U.S stock markets which have hit record highs.

The FTSEurofirst 300 index is up around 9 percent since the start of 2013, while the U.S Dow Jones Industrial Average and S&P 500 indexes have risen nearly 20 percent.

"If we had to take profits at this stage, it would be more in the U.S. rather than in Europe. We feel there is still more juice left in Europe," said Urfer.