European equities extended the previous session's sharp gains on Monday as latest macroeconomic numbers revived hopes that the global economic recovery could remain on track, while firmer metals prices prompted investors to buy mining stocks.
At 0706 GMT, the FTSEurofirst 300 index of top European shares was up 0.4% at 972.02 points. The index surged 3.7% on Friday, helped by strong US retail sales figures. Data on Monday showing Japan's GDP shrank less than expected in the second quarter also improved sentiment.
"If America is not as weak as had been suggested, and we now get a bit of rebound out of Japan, then that's something to go forward," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"The markets have been technically very oversold and on that basis alone, they are due for a period of remission from the selling. Although there are a lot of concerns about the way in which earnings are going to go, the results on balance have been quite good."
Miners got strength from higher metals prices. The mining index rose 1.1%, while BHP Billiton rose 1.5%.