Europe open: Shares make strong start as UK GDP provides boost

(Sharecast News) - European shares made a strong start to the week's final session, with UK growth data offsetting an unexpected fall in German retail sales.

The pan-European Stoxx 600 was up 1% in early trade with all major regional bourses higher.

In the UK, GDP rose by 0.3% between January and March, up from the 0.1% growth previously estimated. This means that GDP is now estimated to be 1.8% above pre- pandemic 2019 levels.

GDP growth for 2022 as a whole was also revised up, to 4.3% from a first estimate of 4.1%, while second-quarter growth was unrevised at 0.2%.

"The UK economy has shown signs of life. GDP is now 1.8% ahead of pre-pandemic levels as the economy grew 0.2% in the second quarter from the first three months of the year. Crucially, GDP was up 0.6% from the same period the previous year, which was better than expected and has given the pound a shove in the right direction," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

In Germany, retail sales recorded an unexpected month-on-month 1.2% fall in August, well below forecasts of a 0.5% rise, official data released on Friday showed.

On an annualised basis retail sales fell by 2.3%. Food sales were down by 1.2% month-on-month, while non-food retail sales slid by 0.7% as online sales plunged by 8.7%.

"Consumers' spending, ex-services and cars, fell sharply in Germany midway through Q3 as it seems the boost to real incomes from falling inflation and rising wage growth is failing to lift consumption, at least to the extent we expected," said analysts at Pantheon Macroeconomics.

In equity news, specialist media firm Future surged as it held annual earnings guidance despite volatile markets, but warned that trading conditions remain mixed.

JD Sports, Adidas and Puma gained after well-received first-quarter results from Nike.

Reporting by Frank Prenesti for Sharecast.com