European shares rose on Friday, boosted by encouraging corporate earnings and upbeat economic data, while prospects for a deal over Greece's debt crisis also lifted Athens' volatile market. The pan-European FTSEurofirst 300 index closed up 0.4 percent at 1,626.83 points. The index reversed most of the previous session's losses and stood 1.7 percent below a near 15-year peak reached last week. Germany's DAX advanced 0.7 percent, putting it within reach of recent record highs, as data showed German business morale was at its highest level in almost a year in April.
There was also cautious optimism on Greece after German Chancellor Angela Merkel expressed hope that a deal could be reached soon to avert bankruptcy. However, euro zone finance ministers told the leftist Greek government it would get no more aid until it has agreed a complete economic reform plan. The Athens ATG equity index rose 3.4 percent, although the ATG remains down 8 percent so far in 2015.
Excluding Greece, European stock markets have had a strong start to the year due to new economic stimulus measures from the European Central Bank and signs of a pick-up in trade within the euro zone. Both the DAX and the FTSEurofirst 300 are up around 20 percent. "Europe has promised growth only to disappoint before. But this time around, there isn't yet real cause for concern. In fact in some countries - namely Italy and Spain - the economic momentum seems to be accelerating," said Gary Paulin, co-founder of brokerage Aviate Global. Swedish home appliances maker Electrolux jumped 9.3 percent after reporting a smaller-than-expected fall in first-quarter earnings.
Renault rose 3.7 percent after posting higher first-quarter revenues as Europe's auto market upturn more than made up for collapsing Russian sales and a prolonged emerging market slump. HSBC, Europe's biggest bank, gained 3 percent after announcing a review on whether to move its headquarters from Britain following regulatory and structural changes in the industry.
Of the 16 percent of STOXX 600 companies to have reported first-quarter results so far, 61 percent have beaten or met expectations, according to Thomson Reuters StarMine data. Thomson Reuters data shows first-quarter earnings are expected to grow 2.8 percent from the first quarter of last year. "Lending is picking up, as is consumer confidence, all of which points to an economic recovery in Europe," said James Butterfill, global equity strategist at Coutts.