European shares bounce back as Tesco advances

LONDON, April 16 Wed Apr 16, 2014 3:12am EDT

LONDON, April 16 (Reuters) - European shares advanced on Wednesday to bounce back from the previous session's losses after China reported economic growth a touch above forecasts, while a rise in retailer Tesco also lifted markets.

The pan-European FTSEurofirst 300 index, which progressed by 16 percent last year and hit a near six-year high of 1,355.29 points earlier this month, was up by 0.9 percent at 1,319.08 points in early session trading.

The euro zone's blue-chip Euro STOXX 50 index also rose 1 percent, to 3,122.50 points.

China's economy grew at its slowest pace in 18 months in the first quarter of 2014, official data showed on Wednesday, with signs of waning momentum already prompting limited government action to steady the world's second-largest economy.

However, the Chinese data, which showed 7.4 percent growth, came in slightly stronger than the median forecast of 7.3 percent in a Reuters poll although it showed a slowdown from growth of 7.7 percent in the final quarter of 2013.

A 4 percent rise in Tesco gave one of the biggest lifts to the FTSEurofirst 300 index, as some traders said Tesco's fall in profits was not as steep as some had feared.

"Tesco this morning was not quite as bad as expected," said Berkeley Futures associate director Richard Griffiths.

"The Chinese slowdown was not too bad either, which is good news, but I would still be tempted to sell any market rally from these sorts of levels," added Griffiths. (Reporting by Sudip Kar-Gupta; editing by Blaise Robinson)

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