February 13, 2015 / 5:30 PM / 5 years ago

Forecast-beating German GDP sends DAX to record high

* FTSEurofirst 300 up 0.6 pct, hits 7-year high

* German GDP grew by 0.7 pct in Q4, more than expected

* Greek markets rally on hopes of debt negotiation progress

* ArcelorMittal rises as details on debt reassure (Updates with closing prices)

By Alistair Smout and Blaise Robinson

LONDON/PARIS, Feb 13 (Reuters) - European shares rose on Friday, boosted by robust growth figures from Germany that sent the country’s blue-chip DAX index to a record high and by a recovery in Greek stocks.

The FTSEurofirst 300 index of top European shares closed up 0.6 percent at 1,502.82 points, having hit a seven-year high. Germany’s DAX was up 0.5 percent, touching a record high at 11,013.850.

The German economy grew by 0.7 percent in the fourth quarter of 2014, much more than expected, with domestic demand lifting Europe’s largest economy out of its mid-year lull.

“It’s extremely reassuring that (Germany) is not losing momentum while the Greece situation remains unresolved,” said Veronika Pechlaner, European equity fund manager at Ashburton.

Greek banking stocks jumped 12.7 percent, extending their recent rebound from a 75 percent slump since last March and returning to pre-election levels as investors began to bet that a meeting on Monday could see Athens reach a deal with its creditors.

National Bank of Greece was up 16.1 percent and Bank of Piraeus up 12.5 percent, while the leading ATG index gained 5.6 percent.

Other markets in the periphery of the euro zone also rose, with Spain’s IBEX up 1.7 percent and Italy’s FTSE MIB 1 percent higher.

“The market is using every little snippet on Greece to make an inference of the result,” Pechlaner said. “Markets for now think a deal will be made, but that might be complacent.”

Shares have also been supported by strong earnings. Halfway through Europe’s earnings season, 55 percent of companies listed on the STOXX 600 have exceeding analyst forecasts, according to Thomson Reuters I/B/E/S data.

In a typical quarter, 48 percent of companies beat estimates. Fourth quarter earnings are expected to grow 20.3 percent.

Commodity-related stocks are in focus as prices slump. Seadrill dropped over 9 percent after the world’s third-biggest offshore driller cut $1.1 billion worth of Petrobras orders from its backlog due to the Brazilian firm’s troubles.

However, shares in Aker Solutions surged 8.7 percent after the Norwegian oil services firm posted fourth-quarter earnings well above expectations.

ArcelorMittal, the world’s largest producer of steel, was up 5 percent, reversing early losses. The group said its profit would fall in 2015, rather than improve as expected, although details about the group’s debt reassured investors.

“People knew about the low iron ore price but the low debt was a positive surprise,” ING analyst Jaap Kuin said.

Europe bourses in 2015: link.reuters.com/pap87v

Asset performance in 2015: link.reuters.com/gap87v

Today’s European research round-up (Additional reporting by Robert-Jan Bartunek in Brussels; Editing by Catherine Evans)

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