US Growth Figures Pare Stock Market Losses

Stock market losses across Europe eased on Thursday on news the US economy grew more than had been expected in the third quarter.

Leading exchanges had all been trading negatively - particularly those in Greece, Spain and Portugal - as bank shares came under renewed pressure amid balance sheet weakness and wider worries about the euro area's recovery.

But there was a recovery of sorts when US GDP data came in better than forecast, with growth measured at an annualised rate of 3.5% between July and September though down from a rate of 4.6% in the previous quarter.

The data was seen as particularly important as it was announced just hours after the Federal Reserve ended its stimulative bond-buying programme .

The demise of Quantitative Easing (QE) - which was credited with fuelling record gains for stocks in recent years - left investors pondering whether shares were over-priced and focused attention purely on the strength of economy.

The Fed has said its first interest rate hike will depend on the recovery.

Fears are growing that stagnation in the euro area and a slowdown in China will damage world prospects.

While Germany, Europe's biggest economy, runs the risk of dipping into recession - partly a result of its links with Russia being damaged by the Ukraine crisis - Spain confirmed on Thursday that its output growth slowed in the past quarter.

Confidence has been shaken in banks in Greece and Italy, as they account for the majority of the 24 institutions which were revealed to have failed European Central Bank stress tests.

US Commerce Department data showed that the deceleration in US growth was mainly due to slower business investment from the second quarter.

Cooling corporate confidence was also evident in consumer spending, the key driver of the world's largest economy, which rose by just 1.8% after increasing 2.5% in the prior quarter.

Disposable personal income growth also slowed to 2.7% from 4.4%.