European stocks firm despite recession gloom

European equities rose on Wednesday as investors shrugged off news that the eurozone recession deepened in the first quarter, dealers said. In midday deals, London's benchmark FTSE 100 index of leading shares rose 0.20 percent to 6,699.34 points. In Paris, the CAC 40 added 0.24 percent to 3,975.72, despite official data showing that France has entered recession. Frankfurt's DAX 30 index gained 0.14 percent to 8,350.86 points, amid news of slender quarterly growth, while Madrid and Milan rallied by 1.18 percent and 0.55 percent respectively. Recession deepened across the eurozone in the first quarter of 2013, official data showed, with a 0.2 percent contraction between January and March. EU data agency Eurostat said that marked the sixth consecutive quarterly shrinkage of economic output across the 17 states that share the euro currency. While core economy Germany clambered out of negative territory with 0.1-percent growth after a 0.7-percent slide at the end of 2012, France logged a 0.2-percent reduction to enter a technical recession. And both Italy and Spain posted 0.5-percent first-quarter declines. "European financial markets have a had a reality check with data," said ETX Capital trader Ishaq Siddiqi. However, he added that share prices held in positive territory amid hopes that the poor data could trigger more stimulus measures from the European Central Bank, which cut interest rates to a record-low 0.50 percent earlier this month. "The outcome of eurozone GDP hasn't triggered a reversal of the bullish tone as many believe that this will only push the ECB to consider options to provide further stimulus measures, and also in part that the Q1 period was affected by cold weather conditions which stalled growth for the core regions," said Siddiqi. In reaction to the data, the European single currency tumbled as low as $1.2888 -- last seen in early April. It later stood at $1.2900, down from $1.2924 late in New York on Tuesday. "The crisis in the eurozone continues, with the French economy slipping back into recession while Germany manages to eke out a modicum of growth," noted IG sales trader Yusuf Heusen. "Eurozone GDP as a whole was unsurprisingly weak, reminding us that while we are no longer expecting a Spanish or Italian bailout on a daily basis, the overall situation remains dire." The euro also hit 132.77 yen -- the highest level since January 2010 -- on the back of Japan's vast monetary easing policies. The dollar meanwhile soared to 102.62 yen, touching its highest level since October 2008, aided also by solid US data. On the London Bullion Market, gold decreased to $1,411.55 an ounce from $1,433.75. Asian stock markets were mostly higher Wednesday, with the tumbling yen pushing Japanese stocks to a fresh multi-year high as improving confidence in the US economy boosted prospects for regional exporters. Tokyo jumped 2.29 percent, climbing above the psychologically key 15,000-mark for the first time in more than five years to end at 15,096.03 points, as the greenback surged against the yen after record gains on Wall Street. US stocks surged to new all-time closing highs Tuesday on renewed optimism after a prominent hedge fund manager said the stock rally of 2013 still had room to go higher. New York's Dow Jones Industrial Average rose 0.82 percent to a record 15,215.25 points. Recent economic data from the United States has pointed towards a steady recovery in the world's largest economy. The next government, regardless of who is president, "will defend Iran's principal positions and the rights of the nation," Araqchi said.