European shares rise

European share prices rose on Tuesday on renewed hopes for a Greek debt deal and after euro zone leaders agreed to a German-led deal on stricter budget controls. While gains were capped by weaker than expected US economic data, on the positive side a senior Greek banker said a deal with private bondholders to restructure 200 billion euros of Greek debt is now largely in place.
"People have become more optimistic for a positive outcome (on Greece) and they're now focusing on fundamental corporate and economic data," said Ian King head of international equities at Legal & General, which has 356 billion pounds under management. "We would need a further uptick in economic indicators to justify the recent move in markets."
The FTSEurofirst 300 index of top European shares rose 0.6 percent to close at 1,037.05 points. It gained 3.6 percent in the month of January. Greek banks were the standout gainers, up 17.3 percent. The index has gained more than 82 percent in January, after steep falls in 2010 and 2011.
Other risers included energy companies, as crude prices gained, partly on optimism arising from the positive developments in the euro zone, and also on supply concerns. The STOXX Europe 600 Oil & Gas Index rose 1.8 percent. US home prices fell more steeply than expected in November, and consumer confidence soured in January, highlighting the hurdles still facing the economic recovery. Separate data showed business activity in the US Midwest grew more slowly than expected in January, hurt by a weaker labour market.
Wall Street, higher in early trade, turned negative after the last of the data was released. European indexes mostly pared gains. The FTSEurofirst 300 index is up more than 21 percent from the 2011 low it hit in September, boosted by global growth prospects, especially in the United States.
But Tuesday's data, coming after weaker than expected US GDP figures on Friday, has caused some equity strategists to be less bullish King also pointed to some weaker corporate data. "We're well through earnings season in the United States and we've had the lowest ratio of (forecasts) beats that we've had for some time." The euro zone's blue chip Euro STOXX 50 index rose 0.5 percent to 2,416.66 points.