LONDON: European stock markets closed firmer Friday on strong US growth figures after a testing week dominated by Middle East unrest, Portugal's debt crisis and Japanese efforts to recover from its devastating earthquake.
Dealers said sentiment overall appears to have steadied following heavy losses on concerns that Middle East unrest and the earthquake in Japan could derail the global economic recovery.
Despite a continued flow of bad news on both fronts, coupled with fresh fears that Portugal might need a debt bailout after its government was voted out mid-week, the stock markets held up relatively well.
Dealers said figures showing the US economy grew 3.1 percent in fourth quarter 2010, up from the previous estimate of 2.8 percent, provided some reassurance for investors keeping a wary watch on the unprecedented developments.
In London, the FTSE 100 index of leading shares up 0.34 percent to 5,900.76 points. In Paris, the CAC 40 added 0.09 percent to 3,972.38 points while in Frankfurt the DAX gained 0.18 percent to 6,946.36 points.
"Friday marked yet another day of gains for European equities with traders continuing to buy into stocks which they feel are good value," said Joshua Raymond, an analyst at London trading group City Index.
The main talking point in London was British energy giant BP after its historic tie-up with Russian group Rosneft for Arctic exploration was ruled illegal given its previous commitments to its TNK-BP joint venture in Russia.
"The ruling is a bit of a setback for the oil giant which is looking to maximise operations and restore its core brand value after the Gulf of Mexico oil leak last year," Raymond said.
BP closed down 0.29 percent on the day.
In Paris, Frederic Rozier at Meeschaert Gestion Privee said the markets were holding up because they were flooded with money looking for an investment.
"The fact that the markets are not reacting to the likely prospect that Portugal will need a bailout shows how resilient they are," Rozier said. "It also shows that the market is full of money looking for a home. At the moment, there are not many alternatives available except to buy stocks," he said.
In Portugal, the country's President Anibal Cavaco Silva met with leaders of political parties in a bid to resolve a deepening political crisis as rail and bus workers went on strike over pay cuts.
Analysts said the most likely outcome would be a snap election at the end of May or early June, leaving a long time for the markets to fret over the results and what would happen next.
Elsewhere in Europe, markets were mostly firmer too, chalking up modest gains.
In New York, stocks were higher in early trade, supported by the revised fourth quarter growth figures and solid corporate results.
The blue-chip Dow Jones Industrial Average was up 0.50 percent at around 1710 GMT, with the tech-heavy Nasdaq Composite adding 0.70 percent.
Better-than-expected results "are helping the markets extend the week's gains despite continued euro-area debt concerns, Middle East tensions and the nuclear crisis in Japan", analysts at brokerage Charles Schwab noted.
In Asian trade earlier Friday, Tokyo gained 1.07 percent, Hong Kong added 1.06 percent, Shanghai also put on 1.06 percent and Sydney rose 0.91 percent.
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