European stocks have advanced on new prospects of Chinese economic stimulus measures owing to weak growth data, while Italy pulled off a bond auction despite a ratings downgrade.
At close on Friday, London's benchmark FTSE 100 index of top companies was up 1.03 per cent to 5,666.13 points, Frankfurt's DAX 30 rallied 2.15 per cent to 6,557.1 points, while in Paris the CAC 40 rose 1.46 per cent to 3,180.81 points.
Rome's FTSE Mib switched into positive territory following a successful Italian government debt sale, standing 0.96 per cent higher at 13,715 points, despite an overnight downgrade from Moody's.
Madrid's IBEX 35 index won 0.52 per cent to 6,590.90 points, but with the Spanish government's 10-year bond yields not far from the danger level of seven per cent, at which other countries have had to ask for a bailout.
US stocks were also higher on their way to breaking a six-day losing streak, with JPMorgan Chase surging more than five per cent after reporting a $US4.4 billion ($A4.36 billion) loss on its mismanaged London derivatives trading operation.
In midday trading, the Dow Jones Industrial Average was up 1.44 per cent, the S&P 500-stock index added 1.31 per cent, while the tech-rich Nasdaq gained 1.04 per cent.
"Markets around the world are higher today on hopes China will implement a new stimulus program following its latest GDP miss," said Briefing.com.
JPMorgan shares jumped as its reported loss on a disastrous dividends hedging operation in April proved less costly than estimates.
The company announced second-quarter profit slid to $US5 billion, still a bumper profit but nine per cent less than the same period last year.
The European single currency gained from Thursday's two-year dollar trough, trading at $US1.2236. It had tumbled to $1.2167 - its lowest since June 30, 2010 - on Spanish debt jitters.
Italy meanwhile raised 3.5 billion euros ($A4.24 billion) in three-year bonds at a sale on Friday, where the rate fell to 4.65 per cent from 5.30 per cent last month. But the rate for a long-term issue rose.
Asian markets mainly gained on Friday after China reported its economy was slowing in line with expectations.
Hong Kong stocks gained 0.35 per cent and Tokyo added 0.05 per cent, while Chinese shares closed flat.
China's economy expanded at the slowest pace for more than three years as dire problems overseas started to hit home hard, fuelling expectations of more stimulus moves.
China's economy grew 7.6 per cent in the second quarter year-on-year, the National Bureau of Statistics said.
That was the weakest rate since the economy expanded by 6.6 per cent during the depths of the global financial crisis at the start of 2009.
In Paris shares in PSA Peugeot Citroen fell almost eight per cent the day after it announced a deep restructuring and 8000 job cuts.
Traders, who had marked the share up initially, turned tail because of unclear prospects for the struggling business and strong political and trade union hostility to the new strategy.
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